EU OMIaRD Publication Marketing-Initiatives 2004

/RGANIC -ARKETING )NITIATIVES
AND 2URAL $EVELOPMENT
! 'UIDE
TO 3UCCESSFUL
/RGANIC
-ARKETING
)NITIATIVES
2ESEARCH )NSTITUTE OF /RGANIC !GRICULTURE
0UBLISHER &RICK &RANKFURT 6IENNA
!CKERSTRASSE s #( n &RICK s 3WITZERLAND
4EL s &AX
%MAIL INFOSUISSE lBLORG s HTTPWWWlBLORG
!UTHORS /TTO 3CHMID AND 4ORALF 2ICHTER &I", &RICK 3WITZERLAND

OF THE BOOK 5LRICH (AMM AND !NDREA $AHLKE 5NIVERSITY OF +ASSEL 'ERMANY
&OREWORD
0ETER -IDMORE 3CHOOL OF -ANAGEMENT AND "USINESS !BERYSTWYTH
5NITED +INGDOM
#ONTRIBUTORS TO #HAPTER AND

2AFFAELE :ANOLI 0OLYTECHNIC 5NIVERSITY OF -ARCHE !NCONA )TALY
%VA 4HELEN )NSTITUTE FOR 4RADE AND -ARKETING 5NIVERSITY OF )NNSBRUCK
!USTRIA (ELMUT ,ABERENZ 5NIVERSITY OF !PPLIED 3CIENCES (AMBURG
'ERMANY
#HAPTER
-ARKUS 3CHERMER AND .ORBERT 'LEIRSCHER )NSTITUTE OF (IGH -OUN
TAIN 2ESEARCH 5NIVERSITY OF )NNSBRUCK !USTRIA
#HAPTER
"ERTIL 3YLVANDER AND !UDE LE &LOCH ).2! ,E -ANS &RANCE
%XAMPLES OF ORGANIC MARKETING INITIATIVES /-)A2$ 0ROJECT 4EAM

DETAILS AND ADDRESSES SEE !NNEX
#OVER DESIGN AND LAYOUT $ANIEL 'ORBA &I", &RICK 3WITZERLAND

#OPY EDITING -ARION -ORGNER &I", &RICK 3WITZERLAND
0RINTED BY 'ARLOFF $RUCKSERVICE -AGDEBURG 'ERMANY
ON RECYCLED PAPER &IRST %DITION IN %NGLISH )3".
Ú /TTO 3CHMID 4ORALF 2ICHTER 5LRICH (AMM !NDREA $AHLKE

!LL RIGHTS RESERVED .O PART OF THIS PUBLICATION MAY BE REPRODUCED
STORED IN A RETRIEVAL SYSTEM OR TRANSMITTED IN ANY FORM OR BY ANY
MEANS ELECTRONICALLY BY PHOTOCOPING OR OTHERWISE WITHOUT THE PRIOR
PERMISSION OF THE PUBLISHER

4ABLE OF CONTENTS
&OREWORD
#HAPTER )NTRODUCTION
#HAPTER !NALYSIS OF THE MARKET AND POLICY ENVIRONMENT

/RGANIC FOOD MARKET IN %UROPE
#ONSUMER MOTIVES AND BARRIERS TO BY ORGANIC PRODUCTS
#ONSUMER ATTITUDES TOWARDS REGIONAL ORGANIC PRODUCTS
%5 SUPPORT POLICIES FOR RURAL DEVELOPMENT
#HAPTER 3UCCESSFUL MARKETING DEVELOPMENT

0RE START PHASE
3TART UP PHASE
-ATURING PHASE
#HAPTER +EY FACTORS OF SUCCESS

)NTERNAL FACTORS
%XTERNAL FACTORS
!NNEX
!NNEX 2EFERENCES FOR FURTHER READING
!NNEX &IGURES ON THE %UROPEAN ORGANIC FOOD MARKET
!NNEX "ACKGROUND INFORMATION ON THE /-)A2$ PROJECT
!NNEX 0UBLICATIONS

!CKNOWLEDGEMENT
4HE WORK UNDERLYING THIS PUBLICATION HAS BEEN CARRIED OUT WITH
lNANCIAL SUPPORT FROM THE #OMMISSION OF THE %UROPEAN #OMMUNI
TIES UNDER THE %UROPEAN 5NIONS &IFTH &RAMEWORK 0ROGRAMME FOR
2ESEARCH AND 4ECHNOLOGICAL $EVELOPMENT FOR THE PROJECT h/RGANIC
-ARKETING )NITIATIVES AND 2URAL $EVELOPMENTv 1,+
4HE AUTHORS ARE GRATEFUL FOR THIS SUPPORT AS WELL AS FOR THE lNANCIAL
SUPPORT GIVEN BY THE 3WISS &EDERAL /FlCE FOR %DUCATION AND 3CIENCE
""7 TO THE WORK OF THE 3WISS RESEARCHERS IN THIS PROJECT
&URTHERMORE THE AUTHORS OF THE BOOK WANT TO THANK ALL MEM
BERS OF THE /-)A2$ PROJECT TEAM WHO CONTRIBUTED TO THE BOOK
)N ADDITION THANKS ARE DUE TO OUR TRANSLATORS AND REVISERS $ARREN
AND *ENNY (ALPIN #HRISTOPHER (AY 0ENELOPE 0OHLNER AND !LISON
6AUGHAN AS WELL AS $ANIEL 'ORBA AND -ARION -ORGNER OF &I",
WHOSE WORK HAS HELPED TO IMPROVE THE LANGUAGE STYLE OF THE BOOK AND
MAKE IT MORE ATTRACTIVE ,AST BUT NOT LEAST THE AUTHORS WISH TO EXPRESS
THEIR GRATITUDE TO ALL RESPONSIBLE PERSONS IN /RGANIC -ARKETING )NI
TIATIVES THROUGHOUT %UROPE WHO TOOK THE TIME TO BE INTERVIEWED AND
ALLOWED US TO REmECT THEIR EXPERIENCES IN THE BOOK
4HE AUTHORS $IPL )NG !GR %4( /TTO 3CHMID AND $R 4ORALF 2ICHTER
&I", 2ESEARCH )NSTITUTE OF /RGANIC !GRICULTURE
$IVISION OF 3OCIO %CONOMICS
!CKERSTRASSE #(n &RICK 3WITZERLAND
%MAIL OTTOSCHMID lBLORG AND TORALFRICHTER lBLORG
WWWlBLORG 4EL &AX
0ROF $R 5LRICH (AMM AND -3C !NDREA $AHLKE

5NIVERSITY OF +ASSEL
!GRICULTURAL AND &OOD -ARKETING &ACULTY OF /RGANIC !GRICULTURAL
3CIENCES 3TEINSTRASSE $ 7ITZENHAUSEN 'ERMANY
%MAIL HAMM UNI KASSELDE WWWAGRARUNI KASSELDEALM
4EL &AX
4HIS PUBLICATION DOES NOT NECESSARILY REmECT THE %UROPEAN

#OMMISSIONS VIEWS AND IN NO WAY ANTICIPATES THE #OMMISSIONS
FUTURE POLICY IN THIS AREA )TS CONTENT IS THE SOLE RESPONSIBILITY OF THE
AUTHORS )T IS BASED ON THE RESULTS OF THE ABOVE MENTIONED PROJECT

&OREWORD
4HE BACKGROUND OF THIS HANDBOOK DERIVES FROM THE RESULTS OF A %U

ROPEAN 2ESEARCH PROJECT /RGANIC -ARKETING )NITIATIVES AND 2URAL
$EVELOPMENT ACRONYM /-)A2$ FUNDED BY THE %UROPEAN #OM
MISSION FROM TO 4HE OVERALL FOCUS OF THE PROJECT WAS TO
IDENTIFY MARKETING AND PROMOTION STRATEGIES THAT CAN MAINTAIN AND
ENHANCE ORGANIC PRODUCTION AND PROCESSING ACTIVITIES 4HIS IS PARTI
CULARLY IMPORTANT AS THE VOLUME OF ORGANIC PRODUCE THAT IS GENERALLY
AVAILABLE IS INCREASING AND SIGNIlCANT PLAYERS SUCH AS LARGE FARMS AND
CONVENTIONAL MARKETING CO OPERATIVES ARE BECOMING INVOLVED IN THE
MARKET )NCREASING VOLUMES MEAN THAT FARM GATE SALES AND MARKETING
THROUGH SPECIALIST SHOPS THOUGH STILL IMPORTANT CAN NOW ONLY BE A
SPECIALISED PART OF MARKETING IN THE ORGANIC FOOD SECTOR 4HE WIDER
WORLD OF SUPERMARKETS LARGER FOOD MANUFACTURERS AND MAINSTREAM
MARKETING INSTITUTIONS PROVIDES OPPORTUNITIES BUT IS ALSO UNCERTAIN
DIFlCULT TO DEAL WITH AND lERCELY COMPETITIVE
4HE PROJECT USED THE TERM /-) /RGANIC -ARKETING )NITIATIVE
TO DElNE AN ORGANISATION IN WHICH @ORGANIC PRODUCERS AND OTHER
PLAYERS INVOLVED SHARE A COMMON INTEREST IN PRODUCING PROCESSING
AND MARKETING ORGANIC PRODUCTS POSSIBLY IN A MIX WITH CONVENTIONAL
PRODUCTS )NVESTIGATING THESE /-)S FROM A RANGE OF PERSPECTIVES
PROVIDED A RICH SOURCE OF INFORMATION -ANY OF THE MORE INTERESTING
EXPERIENCES CONTRIBUTED TO THE DEVELOPMENT OF THE IDEAS SET OUT IN
THIS HANDBOOK AND ARE INCLUDED AS EXAMPLES IN THE TEXT
4HE RAPID INCREASE IN PRODUCTION OF ORGANIC FOOD IS CREATING

NEW AND MORE COMPLEX CHALLENGES FOR MARKETING FROM VEGETABLE
BOX SCHEMES TO LARGE CO OPERATIVES SUPPLYING THE PRECISE QUALITY AND
VOLUME REQUIRED BY SUPERMARKETS 4HIS IS PARTICULARLY IMPORTANT FOR
ORGANIC FARMERS IN LESS FAVOURED AREAS OR OTHER AREAS WHERE MARKE
TING OPPORTUNITIES ARE RELATIVELY UNDERDEVELOPED ! POSSIBLE STRATEGY
FOR MANY FARMERS IS TO CO OPERATE IN REGIONALLY OR NATIONALLY OPERA
TING MARKETING INITIATIVES
4HERE ARE SEVERAL ADVANTAGES OF MARKETING THROUGH COLLECTIVE

MARKETING INITIATIVES

&OREWORD
/RGANIC -ARKETING )NITIATIVE ÀKO +ORN .ORD IN 'ERMANY 0HOTO $ -ENZLER
Q "ETTER COLLECTION OF SUPPLY

Q )NCREASED MARKET POWER
Q 0OSSIBILITIES FOR DIVERSIFYING MARKETING ACTIVITIES
&OR ORGANIC FARMERS INVOLVEMENT IN COLLECTIVE MARKETING HAS

EXISTED FOR MANY YEARS AS A MEANS OF EXPANDING WHAT BEGAN AS A
SMALL AND DISPERSED ORGANIC MARKET 4HE EARLIEST EXAMPLE WE DESCRIBE
IN THIS HANDBOOK HAD ALREADY STARTED IN IN A PERIOD WHEN OR
GANIC FARMING WAS IN ITS PIONEERING PHASE )N RECENT TIMES IN SEVERAL
COUNTRIES ORGANIC FARMING HAS BECOME PART OF THE MAINSTREAM 4HIS
REQUIRES ORGANIC FARMERS TO MARKET THEIR PRODUCTS TO A GREATER EXTENT
THROUGH CONVENTIONAL SALES CHANNELS OF SUPERMARKETS WHICH PROVIDE
NEW CHALLENGES FOR COLLABORATING GROUPS 3OME INITIATIVES HAVE HAD TO
REVISE THEIR OBJECTIVES AND MANY NEW FORMS OF HORIZONTAL AND VERTI
CAL CO OPERATION HAVE BEEN ESTABLISHED

&OREWORD
/RGANIC MARKETING INITIATIVES AND SUSTAINABLE DEVELOPMENT
4HOUGH SUSTAINABILITY IS A MUCH USED WORD IT COVERS A WIDE RANGE OF

COMPLICATED PROCESSES AND ITS MEANING CHANGES DEPENDING ON ONES
VIEWPOINT SO DIFFERENT PEOPLE UNDERSTAND IT IN DIFFERENT WAYS 0ER
HAPS FOR FARMING AND THE WIDER COUNTRYSIDE IT COULD STAND FOR THE
SOLUTION TO THE MANY PROBLEMS AND FEARS ABOUT UNWANTED CHANGES
SUCH AS WORSENING ENVIRONMENTAL CONDITIONS FROM INTENSIVE AGRICUL
TURE LOSS OF YOUNG PEOPLE TO THE CITIES BECAUSE OF POOR WAGES AND
WORKING CONDITIONS BREAKDOWN OF TRADITION 3USTAINABLE DEVELOP
MENT WOULD NOT STOP CHANGES FROM TAKING PLACE BUT WOULD PROTECT
IMPORTANT ASSETS TO MAINTAIN AND IMPROVE THE QUALITY OF RURAL LIFE
#ONVERSION TO ORGANIC FARMING IS AN IMPORTANT STEP TOWARDS
SUSTAINABLE DEVELOPMENT AS IT REDUCES POLLUTION AND SUPPORTS NATU
RAL LIFE CYCLES THAT BUILD FERTILITY AND PROTECT AGAINST PESTS AND DIS
EASES 2EDUCED COSTS AND PREMIUM PRICES CAN IMPROVE FARM INCOMES
ESPECIALLY NOW THAT SUPPORT IS BEING DECOUPLED FROM PRODUCTION
LEVELS "UT IN THE FAST CHANGING WORLD DESCRIBED ABOVE THE ROLE OF
ORGANIC FOOD IS CHANGING $EALING WITH THIS WIDER WORLD IN WHICH
AGRICULTURE IS ONLY ONE PART OF AN EVER MORE COMPLEX WHOLE IS RISKY
4HE GAINS FOR FARMING COMMUNITIES FROM ORGANIC AGRICULTURE COULD
BE LOST UNLESS THE ABILITY TO RESPOND TO THE NEW MARKETING CHALLENGES
DEVELOPS IN AN APPROPRIATE WAY
'ROUPS OF PRODUCERS COMING TOGETHER TO MARKET ORGANIC
PRODUCTS CAN BEGIN TO TAKE BACK CONTROL AND GAIN MORE OF THE VALUE
ADDED ALONG THE FOOD CHAIN 4HERE ARE COSTS OF COURSE 7ORKING
IN GROUPS REQUIRES DISCIPLINE TO MAINTAIN RELIABLE LEVELS OF QUALITY
IN OUTPUT AND SOMETIMES LOWER PRICES HAVE TO BE ACCEPTED FOR THE
SAKE OF LONGER TERM PROlTABILITY 4HE CO OPERATIVE STRUCTURE CAN BE
WEAK IN TERMS OF MANAGEMENT DECISION MAKING AND ENSURING THAT
INVESTMENT IN JOINTLY OWNED ASSETS IS ADEQUATE /N THE OTHER HAND
THE BENElTS FROM SUCCESSFUL COLLECTIVE MARKETING INITIATIVES CAN HELP
TO OVERCOME THE PROBLEMS DESCRIBED ABOVE THAT AFFECT SO MANY RURAL
COMMUNITIES
&IRST COLLECTIVE ORGANIC MARKETING IMPROVES THE COMPETITIVE
POSITION WHEN DEALING WITH OTHER BUSINESSES "RINGING TOGETHER
LARGER VOLUMES OVER LONGER PERIODS OF TIME ALLOWS A RANGE OF DIF
FERENT NEEDS TO BE SERVED FROM FOOD MANUFACTURERS TO DIRECT SALES
IMPROVES PROlTABILITY AND THUS ALLOWS PRICES TO CONTINUE TO BE PAID

&OREWORD
TO FARMERS )F INITIATIVES GET INVOLVED IN PROCESSING MORE OF THE VALUE

ADDED CAN BE PASSED BACK TO FARMERS IN THE FORM OF IMPROVED PRICES
ALTHOUGH IT IS IMPORTANT TO ACCEPT THAT INVESTMENT COSTS ARE NECESSARY
"UT WITH CONTROL OVER SEVERAL STAGES IN THE FOOD CHAIN COMES INmU
ENCE OVER WHERE JOBS ARE GENERATED &ARMERS CAN DECIDE WITHIN SOME
LIMITS WHERE BEST TO BASE THEIR ACTIVITIES FOR THE BENElT OF THEIR COM
MUNITIES SOMETIMES EVEN BEING ABLE TO CREATE JOBS FOR THEMSELVES TO
SUPPLEMENT FARM FAMILY INCOMES
3ECOND CONTROL OVER MARKETING PROVIDES THE OPPORTUNITY TO
BUILD UP THE KNOWLEDGE OF CUSTOMERS ABOUT THE FOOD THEY BUY 4HEY
ALREADY RECOGNISE THE ORGANIC FOOD SYSTEM AS MEETING THEIR CONCERNS
ABOUT FOOD AND HEALTH BUT AN EMPHASIS ON THE LOCAL TRADITIONAL NA
TURE OF FOOD CAN HELP TO WIN LOYALTY FROM THE HOME MARKET AND RE
DUCE SOME OF THE WASTEFUL TRANSPORT INVOLVED IN PRESENT DISTRIBUTION
SYSTEMS /F COURSE IN MANY RURAL AREAS THE HOME MARKET IS LIMITED
AND THE BULK OF OUTPUT HAS TO BE SOLD FURTHER AWAY BUT CONTROL OVER
MARKETING ALLOWS THIS TO BE DONE IN WAYS THAT BOOST THE ENVIRONMEN
TAL IMAGE OF THE PRODUCT AND CAN ALSO CONTRIBUTE TO BUILDING A POSI
TIVE IMAGE FOR THE REGION IN WHICH IT IS PRODUCED
4HIRD COLLABORATIVE MARKETING GETS PEOPLE WORKING TOGETHER TO
SOLVE PROBLEMS 4HE SKILLS NEEDED TO DO THIS ARE THE SAME AS THOSE RE
QUIRED FOR SOLVING LARGER PROBLEMS AND ARE BEST GOT HOLD OF THROUGH
PRACTICE 4HERE IS NOW A GREAT DEAL OF EVIDENCE ON THE IMPORTANCE
OF SELF RELIANCE IN ECONOMICALLY SUCCESSFUL RURAL COMMUNITIES 4HE
TRUST GENERATED BY SUCCESSFUL COLLECTIVE ACTIVITY BUILDS CONlDENCE AND
GETS PEOPLE INVOLVED IN WIDER NETWORKS ON BEHALF OF THE GROUP ONCE
ESTABLISHED THIS CIRCLE OF ACTIVITY ALLOWS MORE AMBITIOUS PROJECTS TO
BE UNDERTAKEN AS WELL AS SPILLING OVER INTO OTHER IMPORTANT BENElTS
4HE PRINCIPLES OF ORGANIC FARMING lT CLOSELY WITH THIS PATH OF SOCIAL
AND CULTURAL DEVELOPMENT AND CAN SUPPORT LASTING AND WORTHWHILE
EFFECTS ON RURAL COMMUNITIES
0ROFESSOR 0ETER -IDMORE #O ORDINATOR OF THE /-)A2$ PROJECT

3CHOOL OF -ANAGEMENT AND "USINESS 5NIVERSITY OF 7ALES
!BERYSTWYTH 5NITED +INGDOM

)NTRODUCTION
4HIS HANDBOOK IS BASED ON THE EXPERIENCE OF ACTIVE AND SUCCESSFUL 7HO IS THE
ORGANIC MARKETING INITIATIVES AND AIMS TO PROVIDE ADVICE FOR GENUINE HANDBOOK
AND PRACTICAL SUSTAINABILITY 4HIS IS NOT EASY SINCE EVERY RURAL COM WRITTEN FOR
MUNITY IS UNIQUE AND THE EXPERIENCE MAY APPLY ONLY TO THAT PAR
TICULAR COMMUNITY "UT THE GUIDELINES THAT THEY OFFER SUCH AS MEE
TING THE SPECIlC REQUIREMENTS OF CONSUMER DEMAND MAINTAINING
HIGH STANDARDS IN TERMS OF PRODUCT QUALITY AND ENVIRONMENTAL IM
PACTS OF THEIR PRODUCTION ENSURING THAT DECISION MAKING IS EFlCIENT
AND EFFECTIVE CAN ALL HELP TO STRENGTHEN AND DEVELOP FARMING THE
COMMUNITIES IT SUPPORTS AND THE LANDSCAPE IT OPERATES IN 4HIS HAND
BOOK FOR A BROAD AUDIENCE WITH AN INTEREST IN ESTABLISHING STRENGTH
ENING AND FURTHER DEVELOPING MARKETING INITIATIVES SUCH AS
Q &ARMERS INVOLVED IN COLLECTIVE MARKETING

Q !DVISORS ESPECIALLY IN REGIONS WHERE FARMERS WANT TO
STRENGTHEN OR IMPROVE THEIR CO OPERATION IN MARKETING
Q 0ROCESSORS INVOLVED WITH MARKETING INITIATIVES
Q -EMBERS AND OFlCIALS OF REGIONAL MARKETING BOARDS OR
GROUPS
Q 0EOPLE WORKING WITH OR FOR NON GOVERNMENTAL ORGANISA
TIONS WHO MAY ACT AS INITIATORS OR PARTNERS OF /-)S
Q 2EGIONAL DEVELOPMENT PLANNERS
!S A CONSEQUENCE WE ARE NOT WRITING FOR SPECIALIST READERS

OUR HANDBOOK HAS BE EASY TO UNDERSTAND 7E WANT TO MOTIVATE PO
TENTIAL READERS TO UNDERSTAND THE BASIC CONCEPTS AND BE INSPIRED OR
WARNED BY THE GOOD AND LESS GOOD EXAMPLES GIVEN
4HE PURPOSE OF THE HANDBOOK IS TO GIVE GUIDANCE FOR PLAYERS

WHO
A 7ANT TO START OR SUPPORT A MARKETING INITIATIVE 7HAT IS THE
B 7ANT TO RE ORIENT A MARKETING INITIATIVE MAIN GOAL OF THE
HANDBOOK
4O MAKE SUCCESSFUL MARKETING POSSIBLE WE DESCRIBE ON THE ONE
HAND THE MAIN CHALLENGES OF THE MARKET AND POLICY ENVIRONMENT FOR

)NTRODUCTION
/-)S AND ON THE OTHER HAND KEY FACTORS FOR MANAGEMENT )N DIF
FERENT STAGES OF THE DEVELOPMENT OF MARKETING INITIATIVES DIFFERENT
PRIORITIES AND ACTIVITIES ARE RELEVANT
#HAPTER INTRODUCES THE BACKGROUND AND OBJECTIVES OF THE

(OW IS THE HANDBOOK )T DESCRIBES DIFFERENT TYPES OF INITIATIVES AND LOOKS AT THEIR
HANDBOOK APPROACHES AND STRATEGIES 4HE IMPORTANCE OF /-)S FOR REGIONAL DE
STRUCTURED VELOPMENT IS OUTLINED
#HAPTER DESCRIBES EMERGING MARKET TRENDS AND THE FUTURE
POLICY ENVIRONMENT FOR MARKETING INITIATIVES 4HIS IS BASED ON THE
PART OF THE /-)A2$ PROJECT THAT EXPLORED THE DEVELOPMENT OF THE OR
GANIC MARKET IN %UROPE INCLUDING CONSUMER TRENDS FOR BOTH ORGANIC
AND REGIONAL PRODUCTS (ERE WE LOOK AT WHAT THE TRENDS MIGHT MEAN
FOR /-)S IN THE FUTURE !LSO %5 POLICIES FOR THE DEVELOPMENT OF RURAL
AREAS ARE OUTLINED AND IN GENERAL THE POTENTIAL SOURCES OF SUPPORT FOR
/-)S ARE HIGHLIGHTED
#HAPTER IS THE PRINCIPAL SECTION OF THE BOOK )T PROVIDES AN
OVERVIEW OF THE INTERNAL SUCCESS FACTORS IN THREE PHASES OF THE LIFECYCLE
OF AN /-) WHICH ARE
THE PRE START OR PREPARATORY PHASE

THE START UP PHASE AND
THE MATURING OR REORIENTATION PHASE
)N PARTICULAR IN THE PRE START PHASE WE SHOW HOW TO IDENTIFY A

GOOD BUSINESS IDEA BASED ON A VISION 4HE VISION NEEDS TO BE TRANSLA
TED INTO OBJECTIVES AND GOOD PARTNERS MUST BE FOUND AND MOTIVATED
TO PARTICIPATE IN THE PROJECT 4HIS SHOULD BE BASED ON ANALYSIS OF THE
MARKET AND THE MARKET ENVIRONMENT AS WELL AS FUNDING POSSIBILITIES
LEADING TO A 37/4 ANALYSIS STRENGTHSWEAKNESSES OPPORTUNITIES
THREATS ! FEASIBILITY STUDY WILL HELP TO DECIDE WHETHER OR NOT TO PRO
CEED TO THE START UP PHASE
)N THE START UP PHASE WE SET OUT THE IMPORTANCE OF DETAILED
ANALYSIS OF INTERNAL AND EXTERNAL FACTORS THAT PROVIDE THE KEY FOR DE
lNING STRATEGIC OBJECTIVES 4HESE WILL HELP IN WORKING OUT EFFECTIVE
MARKETING STRATEGIES AND ESTABLISHING THE CORRECT MARKETING MIX TO
MEET THE NEEDS OF THE TARGET CONSUMER GROUPS -ANAGEMENT PLAN
NING IS A KEY ISSUE FOR SUCCESSFUL MARKETING AND IS THEREFORE THE FOCUS
OF SPECIAL ATTENTION IN THIS BOOK 4HE MOST PROMISING FORM OF ORGANI

)NTRODUCTION
SATION IS EXPLORED AND THE BEST WAYS TO PREPARE IMPLEMENTATION OF

THE MARKETING PLAN 4HERE ARE OPPORTUNITIES BUT ALSO RISKS ATTACHED
TO USING SUPPORT FROM NATIONAL OR REGIONAL FUNDS )N THIS PHASE THE
KEY IS TO MONITOR OBJECTIVES AND ACHIEVE RESULTS MOST EFFECTIVELY
)N THE MATURING PHASE OF AN ORGANISATION NEW QUESTIONS BE
COME RELEVANT SUCH AS HOW OBJECTIVES CAN BE ADAPTED OVER TIME AND
THE WAY STRATEGIES OF THE ENTERPRISE CAN BE DEVELOPED AND COMBINED
TO GAIN SYNERGIES EG WITH SEGMENTATION CO OPERATION PRICEQUALITY
STRATEGY )T IS SHOWN HOW RESULTS CAN BE EVALUATED AND WHAT ADJUST
MENTS ARE NECESSARY TO RESPOND TO A CHANGING ENVIRONMENT AND
MEMBERSHIP INCLUDING ADAPTATION OF ORGANISATIONAL STRUCTURES
MANAGEMENT NETWORKING AND REALLOCATION OF HUMAN AND lNANCIAL
RESOURCES
#HAPTER SUMMARISES THE MAIN FACTORS OF SUCCESS 4HESE IN
CLUDE THE ROLE OF KEY INDIVIDUALS MANAGEMENT THE IMPORTANCE OF
STRATEGIC PLANNING AND CLEAR OBJECTIVES THE ROLE OF INNOVATION THE
ROLE OF COHERENCE MOTIVATION AND IDENTITY BRAND POLICY THE ROLE OF
NETWORKS THE IMPORTANCE OF MARKET RESEARCH PUBLIC FUNDING ECONO
MIES OF SCALE HAZARDS AND RISKS IN GENERAL
4HE AUTHORS HOPE THAT IN ADDITION TO PRESENTING VALUABLE
INFORMATION THE CONTENTS OF THE BOOK WILL STIMULATE ALL THOSE WHO
ARE INVOLVED IN ORGANIC MARKETING INITIATIVES TO REmECT CRITICALLY AND
CONSTRUCTIVELY ON THEIR OWN MARKETING ACTIVITIES

!NALYSIS OF THE MARKET AND POLICY
ENVIRONMENT
/RGANIC FOOD MARKET IN %UROPE
$EVELOPMENTS OF THE MARKET FOR ORGANIC FOOD ARE OF GREAT IMPOR

TANCE FOR ALL ORGANIC PRODUCERS AS THEY DElNE THE FRAMEWORK FOR ALL
BUSINESSES 4HIS CHAPTER GIVES A BRIEF OVERVIEW OF THE MOST IMPORTANT
DEVELOPMENTS IN THE MARKET (OWEVER IT IS NOT EASY TO ANALYSE THE
ORGANIC FOOD MARKET IN %UROPE DUE TO THE ABSENCE OF SYSTEMATIC DATA
COLLECTION OF ORGANIC PRODUCTION OR CONSUMPTION lGURES BY GOVERN
MENT INSTITUTIONS 4HE FOLLOWING SECTION REFERS TO A COMPREHENSIVE
DATA COLLECTION THAT WAS PART OF THE /-)A2$ RESEARCH PROJECT
/RGANIC PRODUCTION HAS SHOWN REMARKABLE GROWTH IN THE S REMARKABLE

IN ALL %UROPEAN COUNTRIES WITH ANNUAL GROWTH RATES RANGING FROM MARKET GROWTH
PERCENT IN !USTRIA TO AS MUCH AS PERCENT IN 3LOVENIA MEASURED IN
TERMS OF THE CERTIlED ORGANIC AREA (OWEVER AS lGURE ! SEE ANNEX
SHOWS THE ORGANIC SHARE OF TOTAL UTILISABLE AGRICULTURAL AREA WAS ONLY
PERCENT IN THE %5 IN 4HERE ARE HUGE DIFFERENCES BETWEEN
COUNTRIES 7HILE THE ORGANIC SHARE OF UTILISABLE AGRICULTURAL AREA WAS
PERCENT IN 'REECE IT WAS AROUND PERCENT IN 3WITZERLAND AND
!USTRIA
7HAT DOES A HIGH ORGANIC UTILISED AGRICULTURAL AREA IN A SPECIlC

COUNTRY MEAN FOR AN /-)
)T IS OBVIOUS THAT AN /-) IN A COUNTRY WITH A LARGE SHARE OF ORGANIC
AREA OPERATES IN A BETTER DEVELOPED MARKET USUALLY WITH MORE COM
PANIES COLLECTING AND PROCESSING ORGANIC PRODUCTS ! HIGH PERCENTAGE
OF ORGANIC AREA ALSO MEANS THAT ECONOMIES OF SCALE IN COLLECTING AND
PROCESSING THE GOODS LEAD TO LOWER COSTS AND THUS LOWER CONSUMER
PRICES WHICH SUPPORTS DEMAND /N THE OTHER HAND A HIGH PERCENT
AGE OF ORGANIC AREA IS NORMALLY ALSO A SIGN OF HIGHER COMPETITION
AMONG SUPPLIERS IE FARMERS COLLECTING WHOLESALERS PROCESSORS ETC

-ARKET AND POLICY ENVIRONMENT
#ERTIlED ORGANIC AREA IS ONLY A ROUGH INDICATOR OF ORGANIC PRO

DUCTION !S ORGANIC YIELDS ARE LOWER THAN CONVENTIONAL ONES AND AS
ORGANIC PRODUCTION TAKES PLACE PREDOMINANTLY IN LESS FAVOURED AREAS
WITH BELOW AVERAGE SOIL FERTILITY THE ORGANIC SHARE OF TOTAL FOOD PRO
DUCTION IS MUCH LOWER THAN THE ORGANIC SHARE OF TOTAL AREA 4HE FACT
THAT THE PRODUCTION STRUCTURE IN ORGANIC AGRICULTURE DIFFERS CONSIDER
ABLY FROM THE CONVENTIONAL PRODUCTION STRUCTURE IN MANY COUNTRIES
MUST ALSO BE TAKEN INTO CONSIDERATION )T MIGHT THEREFORE BE USEFUL
TO LOOK AT TABLES ! AND ! IN THE ANNEX WHERE ORGANIC PRODUCTION
AS A PERCENTAGE OF TOTAL PRODUCTION IN IS LISTED FOR SURVEYED
COUNTRIES AND FOR THE MOST IMPORTANT PRODUCT GROUPS
(IGH PRODUCTION SHARES FOR ORGANIC PRODUCTS DO ILLUSTRATE

UNBALANCED SOMETHING ABOUT THE SCALE OF THE ORGANIC MARKET IN THE DIFFERENT
DEVELOPMENT COUNTRIES BUT A BIG MARKET IS NOT THE SAME AS A HEALTHY MARKET )N
OF SUPPLY AND MANY %UROPEAN COUNTRIES LARGE NUMBERS OF FARMERS HAVE BEEN AT
DEMAND TRACTED BY GOVERNMENT SUBSIDIES FOR CONVERSION OF LAND TO ORGANIC
METHODS !S A RESULT THE GROWTH OF PRODUCTION HAS BEEN STRONGER IN
SOME CASES THAN THE GROWTH OF DEMAND 4HIS UNBALANCED DEVELOP
MENT OF SUPPLY AND DEMAND HAS NOT ONLY LED TO DECREASING PRODUCER
PRICES FOR ORGANIC PRODUCTS BUT ALSO TO MARKETING PROBLEMS FOR OR
GANIC PRODUCTS WITH THE RESULT THAT SOME OF THE ORGANIC PRODUCTION
HAD TO BE SOLD AS CONVENTIONAL PRODUCTS WITHOUT A PRICE PREMIUM FOR
THEIR ORGANIC ORIGIN
7HAT DOES OVERSUPPLY IN A SPECIlC COUNTRY MEAN FOR AN /-)

#LEARLY IT IS MUCH EASIER FOR AN /-) TO OPERATE IN A MARKET WHERE
THERE IS NO SURPLUS IN SUPPLY LEADING TO LOWER ORGANIC PREMIUM PRICES
AND SALES PROBLEMS )F THERE IS A %UROPE WIDE OVERSUPPLY OF AN OR
GANIC PRODUCT PRICE PRESSURE FROM BUYERS AND COMPETITION BETWEEN
PRODUCERS ARE HIGH WHEREAS AN OVERSUPPLY ONLY AT NATIONAL LEVEL
MEANS THAT THERE MAY BE SOME GOOD OPPORTUNITIES FOR EXPORTING THE
PRODUCTS )F COMPETITION AMONG PRODUCERS IS HIGH DUE TO OVERSUPPLY
CUSTOMERS CAN ONLY BE ATTRACTED BY SPECIAL AND ADDITIONAL FEATURES
EG EXCELLENT TASTE ANDOR SERVICES EG HOME DELIVERY

/RGANIC FOOD MARKET
&IGURE ! IN THE ANNEX GIVES AN OVERVIEW OF THE PERCENTAGE OF

ORGANIC PRODUCTS THAT COULD NOT BE SOLD AS ORGANIC IN THE %5 IN OVERSUPPLY FOR
%UROPE WIDE THERE HAVE BEEN SEVERE SALES PROBLEMS FOR GRASSLAND SOME PRODUCTS
BASED ORGANIC PRODUCTS SUCH AS SHEEP AND GOAT MEAT MILK AND BEEF
BUT ALSO FOR WINE OLIVES AND FRUIT WHEREAS THERE HAVE BEEN FEWER
MARKETING PROBLEMS FOR POULTRY EGGS PORK POTATOES AND VEGETABLES
4HE SITUATION AGAIN VARIED CONSIDERABLY IN THE DIFFERENT COUNTRIES
&OR EXAMPLE MARKETING PROBLEMS FOR ORGANIC FRUIT HAVE ONLY BEEN
SEVERE IN )TALY 3PAIN AND !USTRIA WHILE IN MANY OTHER COUNTRIES THE
WHOLE OF ORGANIC PRODUCTION WAS SOLD AS ORGANIC $ETAILS CAN BE SEEN
IN THE TABLES ! AND ! IN THE ANNEX
/N THE OTHER HAND THERE HAVE ALSO BEEN SUPPLY DElCITS FOR
SOME ORGANIC PRODUCT IN THE PAST )N THE /-)A2$ MARKET RESEARCH SUPPLY DElCITS
STUDY SEVERAL MARKET EXPERTS IN ALL COUNTRIES SURVEYED WERE ASKED FOR SOME PROD
IN IF THEY EXPECTED SUPPLY DElCITS FOR THEIR COUNTRY IN AND UCT GROUPS
)N TABLE ! IN ANNEX THE PRODUCTS AND COUNTRIES ARE LISTED
FOR WHICH MARKET EXPERTS EXPECTED THAT NATIONAL PRODUCTION PLUS IM
7HAT DO SUPPLY DElCITS MEAN FOR AN /-) IN A SPECIlC COUNTRY

3UPPLY DElCITS INDICATE THAT INVESTMENTS INTO PRODUCTION AND MARKET
ING OF THE RELEVANT PRODUCTS ARE MORE PROMISING THAN FOR PRODUCTS
WITH A SUPPLY SURPLUS (OWEVER IT IS NECESSARY TO EXERCISE CAUTION
WITH THIS INFORMATION /RGANIC MARKETS ARE VERY SMALL AND THUS VOLA
TILE IN MOST %UROPEAN COUNTRIES )T ONLY TAKES A FEW BIGGER PRODUCERS
TO ENTER THE ORGANIC MARKET TO RESULT IN AN OVERSUPPLY OF A PRODUCT
IN A COUNTRY )N THE PAST THERE HAVE BEEN ENOUGH EXAMPLES OF RAPID
CHANGE BETWEEN SITUATIONS OF SUPPLY DElCITS AND OVERSUPPLY SUCH AS
THE CASE OF MILK IN $ENMARK &RANCE AND THE 5NITED +INGDOM OR PORK
IN 'ERMANY AND $ENMARK 3OME SHORT TERM DISTURBANCES IN THE MAR
KET CAN ALSO BE CAUSED BY FOOD SCANDALS IN THE CONVENTIONAL OR IN THE
ORGANIC FOOD SECTOR 4HE %UROPE WIDE "3% CRISIS IN THE CONVENTIONAL
AGRICULTURAL SECTOR IN LED TO A SUDDEN SHARP INCREASE IN DEMAND
FOR ORGANIC PRODUCTS IN MANY COUNTRIES WHEREAS THE DISCOVERY OF THE
TOXIC PESTICIDE .ITROFEN IN SOME ORGANIC POULTRY PRODUCTS AND EGGS IN
'ERMANY CAUSED SEVERE SALES PROBLEMS FOR ORGANIC FOOD IN 'ERMANY
THAT LASTED FOR SEVERAL MONTHS

PORTS FROM FOREIGN COUNTRIES WOULD BE INSUFlCIENT TO MEET CONSUMER

DEMAND 4HE MOST FREQUENTLY MENTIONED PRODUCT WAS PORK IN
COUNTRIES FOLLOWED BY VEGETABLES IN COUNTRIES FRUIT AND SEEDS
IN COUNTRIES
4HE NATIONAL DEGREE OF SELF SUFlCIENCY AS REGARDS ORGANIC FOOD

PRODUCTS IS ANOTHER IMPORTANT PIECE OF INFORMATION FOR SUPPLIERS
IMPORT AND 4HE DEGREE OF SELF SUFlCIENCY IS HIGHER THAN PERCENT IF A COUN
EXPORT COUNTRIES TRYS PRODUCTION IS HIGHER THAN ITS CONSUMPTION 7HERE THE MEASURE
OF SELF SUFlCIENCY IS LESS THAN PERCENT THIS SUGGESTS THAT THERE IS
A SHORTFALL IN THE NATIONS CAPACITY TO SATISFY ITS OWN CONSUMPTION
THROUGH ITS OWN PRODUCTION 4ABLES ! AND ! IN THE ANNEX SHOW
THE DEGREE OF SELF SUFlCIENCY FOR THE SURVEYED PRODUCT GROUPS IN
ALL COUNTRIES INVESTIGATED 4HEY SHOW THAT IN THERE ARE SOME
COUNTRIES WITH A LOW DEGREE OF SELF SUFlCIENCY FOR ALL OR NEARLY ALL
ORGANIC PRODUCTS 4HESE COUNTRIES ARE THE 5NITED +INGDOM "ELGIUM
7HAT DOES A LOW AND HIGH DEGREE OF SELF SUFlCIENCY IN A SPECIlC

COUNTRY MEAN FOR AN /-)
! LOW DEGREE OF SELF SUFlCIENCY IE WHERE A LARGER SHARE OF DOMESTIC
DEMAND IS SERVED BY IMPORTS OFTEN OPENS UP GOOD OPPORTUNITIES FOR
DOMESTIC SUPPLIERS 3EVERAL CONSUMERS HAVE DOUBTS AS TO WHETHER ALL
IMPORTED ORGANIC PRODUCTS ARE REALLY ORGANIC IN ORIGIN /THER CONSUM
ERS HAVE CONCERNS REGARDING LONG DISTANCE TRANSPORTATION OF ORGANIC
PRODUCTS FOR ENVIRONMENTAL REASONS 4HIS GIVES REGIONAL SUPPLIERS
GOOD OPPORTUNITIES TO SERVE THE DOMESTIC DEMAND 4HIS IS ESPECIALLY
THE CASE IN THE 5NITED +INGDOM AND .ORWAY WHERE THERE IS A STRONG
TREND TOWARDS GREATER DEMAND FOR DOMESTICALLY PRODUCED ORGANIC
FOOD )N THE 5NITED +INGDOM THERE IS ALSO A PUBLIC CAMPAIGN ENCOUR
AGING PEOPLE TO @BUY "RITISH ORGANIC FOOD
! HIGH DEGREE OF SELF SUFlCIENCY IS A SIGN OF GOOD EXPORT OPPORTUNITIES
FOR A COUNTRY &OR AN /-) HOWEVER IT IS MUCH MORE DIFlCULT TO BUILD
UP A UNIQUE IMAGE FOR ITS PRODUCTS IN FOREIGN COUNTRIES ESPECIALLY IF
THE SPECIlC REGION IS NOT WELL KNOWN ABROAD 4HE OPPOSITE MAY BE
THE CASE IF THE REGION IS FAMOUS FOR ITS SPECIALITIES AS IN THE CASE OF
THE #HAMPAGNE REGION OF &RANCE FOR ITS SPARKLING WINE OR THE )TALIAN
0ARMEGGIANO FOR ITS CHEESE

/RGANIC FOOD MARKET
,UXEMBOURG AND .ORWAY /N THE OTHER HAND THERE ARE SOME MAINLY
-EDITERRANEAN COUNTRIES WITH DEGREES OF SELF SUFlCIENCY FAR IN EXCESS
OF PERCENT ESPECIALLY AS REGARD PLANT PRODUCTS )N THESE COUNTRIES
SIGNIlCANT AMOUNTS OF DOMESTIC PRODUCTION ARE EXPORTED TO OTHER
COUNTRIES
!S A RESULT OF SEVERAL MARKET RESEARCH STUDIES IN THE LAST lVE GROWTH RATES FOR
YEARS IT CAN BE STATED THAT THERE HAVE BEEN SOME PRODUCT GROUPS FOR SUPPLY PARTLY
WHICH SUPPLY WAS CONTINUOUSLY HIGHER THAN DEMAND IN MOST %URO HIGHER THAN FOR
PEAN COUNTRIES THESE PRODUCTS WERE MILK AND BEEF ESPECIALLY IN CEN DEMAND
TRAL AND NORTHERN %UROPE WHEREAS THERE WAS AN OVERSUPPLY OF WINE
AND FRUIT IN SOUTHERN %UROPE /N THE OTHER HAND THE SUPPLY OF VEG
ETABLES PORK AND POULTRY WAS LOW IN MOST %UROPEAN COUNTRIES OVER
THE LAST lVE YEARS 4AKING THE SUPPLY OF THE %5 !CCESSION COUNTRIES
INTO CONSIDERATION IT IS TO BE EXPECTED THAT THESE OVERALL TRENDS IN
%UROPE WILL CONTINUE IN THE NEAR FUTURE AS THESE COUNTRIES ALSO HAVE
AN OVERSUPPLY ESPECIALLY OF BEEF WHILE PORK POULTRY AND VEGETABLES
ARE IN SHORT SUPPLY THERE TOO &OR CEREALS AND POTATOES FOR WHICH THE
ORGANIC MARKET IN THE %5 WAS MORE OR LESS IN BALANCE IN THE LAST FEW
YEARS THERE HAS BEEN A TENDENCY TOWARDS OVERSUPPLY AS GOVERNMENT
SUPPORT FOR CONVERSION OF FARMS TO ORGANIC PRODUCTION METHODS IS
VERY ATTRACTIVE FOR FARMERS IN THE EASTERN %UROPEAN COUNTRIES AND
DEMAND FROM DOMESTIC CONSUMERS IS RATHER LIMITED )T SHOULD ALSO
BE NOTED THAT THE GROWTH RATES FOR SUPPLY HAVE BEEN HIGHER THAN
FOR DEMAND IN THE LAST FEW YEARS IN %UROPE 4HIS WILL LEAD TO STRONG
COMPETITION AND PRESSURE ON PRODUCER PRICES FOR NEARLY ALL ORGANIC
PRODUCTS AND HIGHLIGHTS THE NEED FOR CLEAR AND CONVINCING MARKETING
CONCEPTS FOR ALL SUPPLIERS IN THE ORGANIC FOOD MARKET
&OR A DEEPER INSIGHT SEE (AMM 5 'RONEFELD & AND (ALPIN $ !NALYSIS OF
THE %UROPEAN MARKET FOR ORGANIC FOOD /RGANIC -ARKETING )NITIATIVES AND 2URAL $EVEL
OPMENT VOL 5NIVERSITY OF 7ALES !BERYSTWYTH 5+ !N UPDATE OF THIS STUDY WILL BE
PUBLISHED AS 6OL IN THE SAME SERIES IN

#ONSUMER MOTIVES AND BARRIERS TO BUY ORGANIC

PRODUCTS
RESULTS OF 7ITHIN THE SCOPE OF THE /-)A2$ PROJECT A CONSUMER SURVEY OF THE
CONSUMER SUR DEVELOPMENT OF CONSUMER BEHAVIOUR AS WELL AS ATTITUDES EXPECTA
VEYS TIONS MOTIVES AND BUYING BARRIERS CONCERNING ORGANIC FOOD WAS CAR
RIED OUT )N THE FOLLOWING SECTIONS THE MAIN RESULTS AND IMPLICATIONS
FOR /-)S WILL BE DESCRIBED BRIEmY
-OTIVATING FACTORS FOR BUYING ORGANIC PRODUCTS

HEALTH AS 4HE lRST AND MOST IMPORTANT MOTIVATING FACTOR FOR THE PURCHASE OF
A BUYING ORGANIC PRODUCTS ALL OVER %UROPE IS THE HEALTH MOTIVE (EALTH RE
MOTIVATION LATED BUYING MOTIVES ARE GENERALLY CONNECTED TO FRUIT AND VEGETABLES
#ONSUMERS SEEM TO BE QUITE SENSITIVE TO THE @NATURAL @UNADULTERATED
CHARACTER OF PRODUCTS ESPECIALLY OF @UNRElNED AND @BASIC FRESH PRO
DUCE 4HIS MEANS THAT MANY CONSUMERS BELIEVE THEY GET HEALTHIER
FOOD WHEN THEY BUY ORGANIC PRODUCTS
4HE HEALTH ASPECT IS CONSIDERED BY CONSUMERS MAINLY IN TWO
WAYS /N THE ONE HAND CONSUMERS POINT OUT PRODUCT ATTRIBUTES
WHICH THEY PERCEIVE AS HEALTHY CONTAINING NO OR FEW PESTICIDES AND
4HE /-)A2$ PROJECT CONSUMER SURVEYS 0HOTO 4 2ICHTER

#ONSUMER MOTIVES AND BARRIERS
ADDITIVES SPECIAL METHOD OF PROCESSING 4HE HEALTH ISSUE FOR CON

SUMERS IS OFTEN CONNECTED WITH FEELING ACTIVE AND GOOD @GIVES ME
MORE STRENGTH KEEPS ME lT ) CAN MAKE MORE OUT OF THE DAY ) DO NOT
GET TIRED SO QUICKLY ) HAVE MORE VITALITY AND WITH GENERAL VALUES
UNDERLYING WELLBEING OR QUALITY OF LIFE FOR EXAMPLE
/N THE OTHER HAND CONSUMERS RELATE ORGANIC CONSUMPTION TO
THEIR OWN OR OTHERS HEALTH CHILDREN SICK PEOPLE PEOPLE WITH SPE
CIAL NEEDS WHICH CAN BE MAINTAINED OR IMPROVED BY EATING ORGANIC
FOOD &OR FAMILIES WITH CHILDREN FAMILY HEALTH IS CONSIDERED ANOTHER
IMPORTANT REASON FOR BUYING ORGANIC FOOD &AMILY HEALTH IS EXPRESSED
IN TERMS LIKE @HAVING A SENSE OF RESPONSIBILITY FOR MY CHILDREN NOT
WANTING TO GIVE SOMETHING BAD TO MY CHILDREN TAKING CARE OF FAMILY
KIDS SHOULD EAT HEALTHY FOOD OR IT IS IMPORTANT THAT CHILDREN GROW UP
HEALTHY IN THE FUTURE
)T IS QUITE CLEAR THAT THE CHANGE TO ORGANIC IS OFTEN INDUCED BY
IMPORTANT INCIDENTS IN THE LIFE OF A CONSUMER 3UCH SITUATIONS MAY
INCLUDE FOR EXAMPLE THE BIRTH OF A CHILD ILLNESSES OR A DRAMATIC
EXPERIENCE .EVERTHELESS IT IS IMPORTANT TO KNOW THAT CONSUMERS
WHO TURN THEIR ATTENTION TO ORGANIC PRODUCTS BECAUSE OF A SENSE OF
RESPONSIBILITY FOR THEIR CHILDRENS HEALTH n WITHOUT BECOMING AWARE
OF THE WIDE RANGE OF BENElTS OF ORGANIC PRODUCTS n ARE MORE LIKELY TO
RETURN TO BUYING CONVENTIONAL PRODUCTS AS SOON AS THEIR CHILDREN START
EXPRESSING THEIR OWN WANTS
7HEN CONSIDERING A SPECIlC COUNTRY AN INTERESTING PHENOM
ENON CAN BE SEEN IN 3WITZERLAND WHERE IN THE CONTEXT OF MEAT THE
EMPHASIS ON ANIMAL WELFARE IS SO STRONG THAT THE HEALTH ASPECT IS
HARDLY TOUCHED ON )N $ENMARK THE ADDITIONAL VALUE OF GOOD HEALTH
FOR HUMANS AND ANIMALS IS A MOTIVATING FACTOR 4HIS IS EXPRESSED BY
SPECIlC $ANISH COMMENTS SUCH AS @WISH TO PROTECT HUMANS AND ANI
MALS @WANT PEOPLE TO BE FERTILE IN THE LONG TERM OR @GENERAL HEALTH
!NOTHER IMPORTANT MOTIVATING FACTOR FOR BUYING ORGANIC PRO ANIMAL WELFARE
DUCTS IS ANIMAL WELFARE !PPROPRIATE HUSBANDRY IS AN IMPORTANT AS A BUYING
ARGUMENT FOR BUYING ORGANIC PRODUCTS 4HIS RESULTS FROM PEOPLE FEEL MOTIVATION
ING RESPONSIBLE AND WANTING TO SUPPORT ANIMAL WELFARE AS THEY WOULD
OTHERWISE SUFFER FROM A BAD CONSCIENCE !PPROPRIATE HUSBANDRY IS
SEEN AS ANIMALS RECEIVING HEALTHY FODDER NOT CONTAINING BONE MEAL
BEING NATURAL ANIMALS BEING ABLE TO GRAZE FEWER DRUGSHORMONES
AND BEING ABLE TO MOVE FREELY INSIDE AND OUTSIDE OF THEIR SHEDS
)N MANY COUNTRIES ANIMAL WELFARE IS AN ADDITIONAL MOTIVATING

-ANY CONSUMERS PREFER NATURALLY PRODUCED FOOD FOR THEMSELVES OR THEIR CHILDREN
0HOTO - -ORGNER
FACTOR WHEN BUYING DAIRY PRODUCTS AND ESPECIALLY WHEN IT COMES TO

BUYING ORGANIC MEAT AND MEAT PRODUCTS BUT ITS IMPORTANCE VARIES AS
DO THE ATTRIBUTES THAT ARE LINKED TO APPROPRIATE HUSBANDRY !S MEN
TIONED BEFORE THE 3WISS VIEW ANIMAL WELFARE AS THE STRONGEST MOTIVA
TING FACTOR WHEN BUYING MEAT AND DAIRY PRODUCTS )N -EDITERRANEAN
COUNTRIES FOR EXAMPLE )TALY AND &RANCE THE ISSUE OF ANIMAL WELFARE
DOES NOT PLAY SUCH AN IMPORTANT ROLE
4O SEE FOOD AS ENJOYMENT CAN ALSO BE A MOTIVATING FACTOR FOR
FOOD AS BUYING ORGANIC PRODUCTS %XPERIENCING GOOD TASTE MAKES PEOPLE FEEL
ENJOYMENT SATISlED AND CONTRIBUTES TO A GENERAL GOOD FEELING 'OOD TASTE AND
TEXTURE ARE SPECIlC ATTRIBUTES WHICH GIVE CONSUMERS PLEASURE WHEN
EATING ORGANIC PRODUCTS ! NUMBER OF THE ATTRIBUTES MAKING PEOPLE
BELIEVE THAT ORGANIC PRODUCTS ARE HEALTHIER ALSO MAKES THEM BELIEVE
THAT THE TASTE IS BETTER TOO !PPROPRIATE HUSBANDRY LEADS TO GOOD

QUALITY MILK AND MEAT PRODUCTS MAKING THEM NOT ONLY HEALTHIER BUT
ALSO TASTIER 4HE SAME CONCEPT APPLIES TO NATURAL PRODUCTION )N MOST
CASES THE ABSENCE OF PESTICIDESFERTILIZERS AND CHEMICALSADDITIVES IN
PRODUCTION LEADS CONSUMERS TO FEEL THAT FOOD PRODUCTS ARE HIGHER
QUALITY AND BETTER TASTING
)N MOST %UROPEAN COUNTRIES ENVIRONMENTAL CONCERNS ARE A ENVIRONMENTAL

MOTIVATING FACTOR FOR BUYING ORGANIC PRODUCTS BUT NOT AS STRONG AS CONCERNS
NON ALTRUISTIC VALUES SUCH AS HEALTH OR FOOD FOR ONES OWN ENJOYMENT AS A BUYING
3OME PEOPLE WANT TO ACTIVELY SUSTAIN AND PROTECT THE ENVIRONMENT MOTIVATION
WITH THEIR PURCHASE DECISION 4HE RESULTING VALUES ARE ENVIRONMEN
TAL PROTECTION SUSTAINABILITY HARMONY WITH AND RESPECT FOR NATURE
AND ALSO OTHER PEOPLES HEALTH AND WELL BEING .ATURE SHOULD BE
PRESERVED AS A HEALTHY ENVIRONMENT IS SEEN AS A PREREQUISITE FOR A
HEALTHY LIFE FROM WHICH FUTURE GENERATIONS WILL ALSO BENElT #ON
TRIBUTING TO ENVIRONMENTAL PROTECTION AND SUSTAINABILITY BY BUYING
ORGANIC PRODUCTS SOOTHES THE CONSUMERS CONSCIENCE AND GIVES RISE TO
A GOOD FEELING SIMILAR TO THE ANIMAL WELFARE MOTIVE
/NE WAY TO CONTRIBUTE TO ENVIRONMENTAL PROTECTION IS SEEN IN
BUYING PRODUCTS THAT ARE NATURALLY PRODUCED NO OR REDUCED USE OF
PESTICIDESFERTILIZERS FEWER ADDITIVESCHEMICALS AND NATURALHEALTHY
FODDER !N ALTERNATIVE IS BUYING LOCALREGIONAL AND SEASONAL PRO
DUCTS )N THIS WAY ONLY SHORT DISTANCE TRANSPORTATION IS NECESSARY
AND RESOURCES ARE NOT WASTED (EALTH AND ENVIRONMENTAL PROTECTION
ISSUES APPEAR TO BE CONNECTED AS THEY ARE ROOTED IN THE SAME AT
TRIBUTES %NORMOUS DIFFERENCES EXIST BETWEEN COUNTRIES AND PRODUCT
CATEGORIES %NVIRONMENTAL ISSUES HAVE THE STRONGEST IMPACT ON BUY
ING DECISIONS WHEN IT COMES TO FRUIT AND VEGETABLES 4HEY ARE BOUGHT
BECAUSE THEIR NATURAL PRODUCTION IS EXPECTED TO PREVENT POLLUTION
THROUGH REDUCED USE OF PESTICIDESFERTILIZERS
4RUST CAN BE MENTIONED AS A MOTIVATING FACTOR BUT ALSO AS A TRUST AS A

BARRIER FOR BUYING ORGANIC PRODUCTS (ERE TRUST IS SEEN AS A MOTI MOTIVATING
VATING FACTOR 4HE REASON WHY CONSUMERS WANT TO TRUST IN ORGANIC FACTOR
LABELSPRODUCTS CAN BE FOUND IN VALUES SUCH AS HEALTH SAFETY AND
ANIMAL WELFARE 4HE ABILITY TO TRUST ALSO HELPS PEOPLE TO MAKE BETTER
DECISIONS AND SOOTHES THEIR CONSCIENCE AS THEY ARE LESS CONCERNED
(OWEVER IT IS CLEAR THAT CONSUMERS WANT TO BE SURE THAT THEY CAN TRUST
ORGANIC PRODUCTS AND THAT PRODUCERS AND CONTROL ORGANISATIONS WILL

OPERATE ACCORDING TO THE RULES 4HEY WANT TO BE SURE THAT THEY CAN BE
LIEVE IN WHAT IS PROMISED BY PRODUCERS AUTHORITIES AND PROMOTION
7HEN CONSUMERS WERE QUESTIONED ON ISSUES THAT INSPIRE THEIR
TRUST IN AN ORGANIC LABEL THE FOLLOWING MAIN TRUST FACTORS EMERGED
TRANSPARENCY NOLESS MISUSE OF THE LABEL INFORMATION ABOUT THE
LABELLING SCHEME CLEARLY DElNED STANDARDS STRICT CONTROLS PERSONAL
VERIlCATION EXISTING LABELS ISSUING ORGANISATIONS AND RELIABLE PEOPLE
ORGANISATIONS 4HE COGNITIVE STRUCTURES HOW TRUST FACTORS ARE INTER
LINKED AND WHICH ARE DOMINANT DIFFER BETWEEN COUNTRIES BUT TRANS
PARENCY INFORMATION CLEARLY DElNED STANDARDS AND STRICT CONTROLS
ARE SEEN AS IMPORTANT ISSUES IN ALMOST ALL OF THE %UROPEAN COUNTRIES
2EGULAR CONSUMERS OF ORGANIC FOOD ESPECIALLY SEE THE PREMIUM

SPECIlC QUALITY QUALITY OF ORGANIC FOOD AS A MOTIVATING FACTOR 4HEY POINT OUT BETTER
AS A BUYING TASTE HIGHER NUTRITIONAL VALUE OF PRODUCTS AS REGARDS VITAMINS MIN
MOTIVATION ERALS ETC AND EVEN A LONGER SHELF LIFE 7ITH REGARD TO MEAT THEY STATE
THAT IT CAN BE USED IN BETTERDIFFERENT WAYS
&INALLY IT MUST BE MENTIONED THAT FOR MANY REGULAR CONSUM
ERS EATING ORGANIC IS A LIFESTYLE CHOICE REGARDLESS OF INCOME 4HEY
PAY ATTENTION TO QUALITY AND THEY ARE CONVINCED THAT ORGANIC FOOD IS
HEALTHIER
"ARRIERS TO BUYING ORGANIC PRODUCTS

4HE MOST IMPORTANT BARRIER TO BUYING ORGANIC PRODUCTS IS THE PRICE
4HE PRICE ISSUE IS MENTIONED IN ALL COUNTRIES
4HE PRICE OF ORGANIC FOOD IS EITHER TOO HIGH OR THE CONSUMERS

ARGUE THAT THEIR OWN FOOD BUDGET IS TOO LOW %VEN REGULAR CONSUM
ERS DESCRIBE THE PRICE LEVEL AS VERY HIGH AND ARE NOT ABLE TO CONSUME
ORGANIC PRODUCTS FOR ECONOMIC REASONS BUT THEY PREDOMI
PRICE AS A NANTLY SEE A CORRESPONDING ADDED VALUE !LSO SOME CONSUMERS STATE
BUYING BARRIER QUITE SPECIlCALLY THAT THE PRICE PERFORMANCE RATIO IS NOT JUSTIlED )N
FACT PERCEIVED @POOR VALUE FOR MONEY IS THE CURRENT IMPORTANT BAR
RIER TO BUYING AND NOT THE ABSOLUTE PRICE LEVEL AT LEAST IN $ENMARK
&RANCE 'ERMANY 5NITED +INGDOM AND 3WITZERLAND @4HE WHOLE
TRANSPORTATION OF ORGANIC PRODUCTS IS OFTEN NOT ECOLOGICAL 7HY IS
IT ACTUALLY CALLED ORGANIC &OR WHAT SHOULD ) ACTUALLY PAY UP TO
MORE 3WITZERLAND /FTEN IT IS NOT THE ACTUAL PRICE THAT IS RELEVANT
FOR GENERAL ACCEPTANCE OF ORGANIC FOOD BUT THE PRICE FEELING EVOKED

BY THE PRECISE BUYING SITUATION AS ILLUSTRATED BY THIS 3WISS RESPON

DENT @4HERE ARE DAYS WHEN ) THINK TODAY IT IS WORTH BUYING A VERY
SPECIAL AND EXPENSIVE CHEESE WHILE ON OTHER DAYS ) LOOK FOR THE MOST
REASONABLY PRICED CHEESE FOR MYSELF
#ONSUMERS WHO DO NOT OR ONLY OCCASIONALLY BUY ORGANIC
PRODUCTS SEE ORGANIC FARMING AS SOCIALLY IMPORTANT AND DESIRABLE
BUT THEY DO NOT PERCEIVE ANY PERSONAL BENElT AND ORGANIC PRODUCTS
ARE SEEN AS TOO EXPENSIVE
&OOD AS ENJOYMENT CAN ALSO BE A BARRIER %SPECIALLY IN THE CASE QUALITY ASPECTS
OF FRUIT AND VEGETABLES BAD APPEARANCE AND LACK OF FRESHNESS ARE SEEN AS A BUYING BAR
AS A PROBLEM /RGANIC FRUIT AND VEGETABLES @LOOK SHRIVELLED WRINKLED RIER
HAVE SPOTS ARE DISCOLOURED OR GENERALLY @DO NOT LOOK APPETIZING
/FTEN THIS IMPRESSION IS CONNECTED WITH A PERCEPTION THAT THEIR
CONDITION AT THE POINT OF SALE IS NOT AS FRESH AS CONVENTIONAL PROD
UCTS (OWEVER SOME CONSUMERS ARGUE THAT WHEN lNDING FRUIT WITH
AN EXCELLENT APPEARANCE THEY DO NOT BELIEVE THAT THESE FRUITS WERE
PRODUCED ORGANICALLY
7HEN ASKING PEOPLE WHY THEY DO NOT BUY ORGANIC PRODUCTS ONE TRUST ASPECTS AS
ARGUMENT IS @DOUBTFUL ORGANIC LABELS IN WHICH PEOPLE HAVE NO TRUST A BUYING BARRIER
@/RGANIC FARMERS CHEAT @ORGANIC FARMERS USE MEDICINE FOR ANIMALS AS
WELL @ORGANIC FARMERS HAVE LOST IDEALISM AND FOCUS ONLY ON MONEY
@CATTLE ARE FED WITH FODDER WHICH IS BOUGHT @FODDER SCANDALS @EVERY
FARMER TREATS HIS FRUIT WITH PESTICIDES AND @FRAUD IN THE LABELLING OR
@BIG COMPANIES CHEAT PEOPLE ARE EXAMPLES OF THE DOUBTS PEOPLE HAVE
WITH REGARD TO ORGANIC PRODUCTS /N THE OTHER HAND CONVENTIONAL
PRODUCTS ARE CREDITED WITH TRUST AND THEREFORE PREFERRED ESPECIALLY
WHEN THEY ARE PRODUCED LOCALLY 4HIS ARGUMENT BECOMES MORE FORCE
FUL AS NON REGULAR CUSTOMERS OFTEN SEE NO DIFFERENCE AND CONSE
QUENTLY NO ADDITIONAL VALUE FOR THEIR MONEY 7HERE TRUST IS LACKING
THE PERCEIVED HIGHER PRICE IS EVEN LESS ACCEPTABLE
,ACK OF AVAILABILITY IS ALSO A STRONG ARGUMENT FOR NOT BUYING AVAILABILITY AS

ORGANIC PRODUCTS 4HE STATEMENT @NOT AVAILABLE REFERS MOSTLY TO THE A BUYING BARRIER
REGULAR SHOPPING PLACES PEOPLE USE &OR NON REGULAR CONSUMERS WHO
HAVE INSUFlCIENT INFORMATION THE USUAL ARGUMENT PREVENTING THEM
FROM CHANGING THEIR SHOPPING BEHAVIOUR OR LOOKING FOR THE PRODUCTS
IN THE SHOP IS THAT PRODUCTS ARE @DIFlCULT TO lND &REQUENTLY ORGANIC

CONSUMPTION IS ASSOCIATED WITH INCONVENIENCE 4HIS IS CONNECTED

WITH LACK OF AVAILABILITY AS WELL AS WITH PREPARATION AT HOME 4HE
PURCHASE OF ORGANIC FOOD IS DESCRIBED AS MORE TIME CONSUMING 4HE
CONSTANTLY INCREASING RANGE OF lNISHED AND SEMI lNISHED PRODUCTS
ON THE SUPERMARKET SHELVES SHOWS THAT FEWER PEOPLE ARE ABLE TO SPEND
TIME AND EFFORT ON COOKING /RGANIC PRODUCTS HOWEVER ARE lRST OF
ALL ASSOCIATED WITH FRESH AND NATURAL AND UNPROCESSED OR MINIMALLY
PROCESSED PRODUCTS THAT REQUIRE A CERTAIN AMOUNT OF PREPARATION
TIME .ON BUYERS AND OCCASIONAL BUYERS OF ORGANIC PRODUCTS OFTEN
WORRY THAT AN INCREASE IN CONSUMPTION OF ORGANIC FOOD ALSO LEADS
TO EROSION OF LEISURE AND OF PURCHASING POWER @TOO MUCH MONEY IS
SPENT ON THESE PRODUCTS 4HE PURCHASE OF ORGANIC FOOD TENDS TO BE
SEEN AS A BURDEN AND ASSOCIATED WITH RESTRICTIONS
)MPLICATIONS FOR /-)S

&OR AN /-) IT IS IMPORTANT TO KNOW HOW TO DEAL WITH CONSUMER
MOTIVATIONS AND BARRIERS TO BUY ORGANIC PRODUCTS $EALING WITH
MOTIVATION IS NOT ALL THAT DIFlCULT )T IS THE TASK OF AN /-) TO ENCOUR
AGE A POSITIVE OPINION ON THE PART OF THE CONSUMER 4HE USE OF THE
MARKETING INSTRUMENT COMMUNICATION POLICY SEE CHAPTER WILL
BE VERY HELPFUL FOR THIS PURPOSE (OWEVER PRIMARY MOTIVATING FAC
TORS ARE ALSO PRIMARY EXPECTATIONS WITH REGARD TO ORGANIC FOOD 7HEN
CONSUMERS OBTAIN INFORMATION THAT DOES NOT MEET THEIR EXPECTATIONS
THE PERCEIVED ADDITIONAL VALUE OF ORGANIC PRODUCTS AND CONSUMERS
WILLINGNESS TO PAY HIGHER PRICES FOR IT ARE CLEARLY REDUCED
%VEN MORE IMPORTANT HOWEVER IS THE QUESTION OF HOW TO RE
DUCE BARRIERS 4HE FOLLOWING SECTION WILL OFFER SOME ADVICE ON WHAT
AN /-) CAN DO TO REDUCE THE BARRIERS
&OR MANY CONSUMERS IN ALL %UROPEAN COUNTRIES PRICE IS THE

PREMIUM QUAL MAIN BARRIER PREVENTING OR LIMITING THE PURCHASE OF ORGANIC FOOD )T
ITY POSITIONING IS DIFlCULT FOR THE /-) TO INmUENCE THE PRICE ESPECIALLY IF THE /-)
SUPPLIES RETAILERS 4HEREFORE THE ONLY THING THE /-) CAN DO IS TO GIVE
CONSUMERS INFORMATION ALONG WITH THE PRODUCT TO THE EFFECT THAT
THEY ARE NOT ONLY BUYING THE PRODUCT BUT ALSO AN ADDITIONAL BENElT
LIKE BETTER QUALITY HEALTH ETC 4HE CONSUMER MUST BE MADE AWARE
THAT SHEHE IS RECEIVING BETTER VALUE FOR HISHER MONEY 0ROMOTIONAL
SCHEMES LIKE TRIAL TASTING OR FREE SAMPLES WOULD BE SUPPORTIVE AT THIS
POINT SEE CHAPTER

$ISTRUST IS ANOTHER BARRIER TO BUY ORGANIC PRODUCTS ! MAIN IMPROVED

DILEMMA SEEMS TO BE THAT PEOPLE TRUST PEOPLE RATHER THAN LABELLING CONSUMER
SCHEMES )T IS THEREFORE THE TASK OF THE /-) TO BUILD UP A RELATIONSHIP INFORMATION
OF TRUST WITH THE CONSUMER (ANDOUTS CONTAINING INFORMATION ON THE
/-) THE PRODUCT AND THE METHOD OF PRODUCTION MAY BE DISTRIBUTED
WITH THE PRODUCT !NOTHER TRUST BUILDING MEASURE MIGHT BE TO GIVE
THE CONSUMER THE POSSIBILITY OF VISITING THE /-) OR EVENTS CENTRED
AROUND THE /-) 0ERSONALISATION OF THE RANGE ON OFFER AND PERSONAL
CONTACT CAN HELP PEOPLE OVERCOME THEIR MISTRUST OR EVEN BUY ORGANIC
PRODUCTS WHEN THE CONSUMER WOULD NOT NORMALLY BUY ORGANIC FOOD
SEE CHAPTER
!S A CONSEQUENCE THE CONSUMER MUST ALSO RECOGNIZE THAT OR IMPROVED
GANIC PRODUCTS ARE OF HIGH QUALITY 4HIS MEANS THAT THE /-) MUST QUALITY
PRODUCE HIGH QUALITY PRODUCTS UNDER THE SAME LABEL 3ELLING DIFFERENT STANDARDS
QUALITY PRODUCTS TO THE CONSUMER IS OUT OF THE QUESTION 4HE /-)
MUST TRY TO GET AWAY FROM THE IMAGE THAT ORGANIC PRODUCTS ARE HEALTHY
BUT DO NOT TASTE GOOD AND DO NOT LOOK PARTICULARLY ATTRACTIVE 4HE FACT
THAT ORGANIC PRODUCTS ARE PREMIUM PRODUCTS NEEDS TO BE COMMUNI
CATED CONSISTENTLY AND SPECIlCALLY IN DETAIL SEE CHAPTER
/CCASIONAL CONSUMERS ESPECIALLY CRITICISE THE AVAILABILITY OF IMPROVED

ORGANIC PRODUCTS )N MANY CASES IT IS NOT ONLY A MATTER OF EXPANDING PRODUCT
THE RANGE BUT ALSO ENSURING ADEQUATE PRESENTATION OF ORGANIC FOOD AVAILABILITY
AT THE POINT OF SALE TO MAKE THE CONSUMER NOTICE WHAT IS ON OFFER )T
IS DIFlCULT FOR /-)S TO INmUENCE THE PRESENTATION OF THEIR PRODUCTS
FOR EXAMPLE IN A SUPERMARKET .EVERTHELESS THE /-) SHOULD TRY TO
AROUSE THE INTEREST OF THE CONSUMER WITH THE PRODUCTS THEMSELVES
)NTERESTING EASILY RECOGNISABLE PACKAGING INFORMATION AROUND THE
PRODUCT AND SHOWING THE SPECIAL PRODUCT ATTRIBUTES ARE JUST SOME
IDEAS FOR CATCHING THE ATTENTION OF THE CONSUMER SEE CHAPTER
#ONVENIENCE PRODUCTS ARE ALSO A VERY IMPORTANT TOPIC 4HE IDEA IMPROVED
THAT ORGANIC PRODUCTS ARE JUST FOR PEOPLE WHO CAN COOK VERY WELL OR CONVENIENCE
AT LEAST HAVE PLENTY OF TIME TO COOK IS STILL WIDESPREAD )T IS RATHER STANDARDS
DIFlCULT FOR THE /-) TO OFFER CONVENIENCE PRODUCTS 4HE /-) SHOULD
NEVERTHELESS TRY TO OFFER READY TO USE PRODUCTS SUCH AS MIXED SALAD
IN A FRESH BOX PEELED POTATOES OR CARROTS ! HIGHER PROCESSING STAND
ARD FOR /-) PRODUCTS ALSO OPENS NEW MARKET CHANNELS SUCH AS THE
FOOD SERVICE INDUSTRY OF CONVENIENCE SHOPS IN RAILWAY STATIONS AND

MOTORWAY STOPS !NOTHER POSSIBILITY FOR AROUSING THE INTEREST OF THE

CONSUMER IS TO PROVIDE QUICK AND SIMPLE RECIPES WITH THE PRODUCT FOR
PREPARING AN EASY MEAL IN A SHORT TIME SEE CHAPTER
)F THE /-) IS MARKETING ITS PRODUCTS IT SHOULD BE AWARE THAT A
HIGHLIGHT PROBLEM MAY BE POSED BY THE FACT THAT WHEN PEOPLE ARE ASKED WHAT
ASPECTS OF THEY ASSOCIATE ORGANICS WITH THEY MENTION @HEALTHY NUTRITION BUT
HEALTHY CONVERSELY THEY DO NOT IMMEDIATELY ASSOCIATE HEALTHY NUTRITION WITH
NUTRITION ORGANIC PRODUCTS 4HERE ARE NUMEROUS POPULAR PUBLICATIONS ON THE
TOPIC OF @HEALTHY EATING AND NUTRITION THAT MAKE NO MENTION OF THE
ASPECT OF ORGANIC FOOD )N ADVERTISING PROMOTION AND CONSUMER
EDUCATION IT IS THEREFORE RECOMMENDED THAT THESE CHARACTERISTICS BE
HIGHLIGHTED IN THE HOPE THAT CONSUMERS WILL MAKE THE ASSOCIATION
WITH ORGANIC PRODUCTS
#ONSUMERS EXPECT A GREAT DEAL FROM ORGANIC PRODUCTS &OR THE
COMMUNICATE MAJORITY THEY SHOULD COMBINE ALL THE ADVANTAGES OF CONVENTIONAL
LIFESTYLE PRODUCTS RANGE AVAILABILITY QUALITY AND FURTHERMORE THEY SHOULD
MESSAGES GIVE THE IMPRESSION THAT THE CONSUMER HAS COMMITTED HIMSELFHERSELF
TO A MORALETHICAL PURPOSE ANDOR HAS PERSONALLY DONE SOMETHING
FOR HISHER OWN OR FAMILYS HEALTH AND WELL BEING /RGANIC PRODUCTS
MUST BE PUT ACROSS AS SUPPORTING A MODERN LIFESTYLE @0LEASURE WITH
OUT REGRET TOWARDS ENVIRONMENT AND ANIMALS SEE CHAPTER 3LO
GANS LIKE @/RGANIC KETCHUP n RED BY NATURE OR @/RGANIC APPLE JUICE
n SWEETENED BY NATURE OR @/RGANIC PASTA n NATURE BITE BY BITE WOULD
LINK ORGANIC PRODUCTS TO FOOD AND LIFE ENJOYMENT AND A NATURAL WAY
OF LIFE
,OOKING AT ALL THE BARRIERS TO BUYING ORGANIC FOOD SHOWS THAT
INCREASED ONE MAJOR PROBLEM IS LACK OF INFORMATION #ONSUMERS ESPECIALLY
CONSUMER OCCASIONAL CONSUMERS DO NOT HAVE ENOUGH INFORMATION ON ORGANIC
INFORMATION PRODUCTS AND THEREFORE DISTRUST THEM /NE MAJOR TASK OF THE /-)
SHOULD BE TO GIVE AS MUCH INFORMATION AS POSSIBLE ON ORGANIC PROD
UCTS TO THE CONSUMER )NFORMATION SESSIONS IN THE STORE @OPEN DAYS
AT THE /-)S FARMS AND PROCESSORS mYERS SALES FOLDERS ARE JUST SOME
POSSIBLE WAYS OF BRINGING MORE INFORMATION TO CONSUMERS SEE CHAP
TER
&ROM THIS CHAPTER THE FOLLOWING RECOMMENDATIONS AND ADVICE
FOR /-)S RESULT

Q 4HE ADDITIONAL VALUE OF ORGANIC PRODUCTS MUST BE COM

MUNICATED HEALTH TASTE CONTRIBUTION TO ENVIRONMENTAL
PROTECTION FOOD AS ENJOYMENT ETC 5SE THE MARKETING IN
STRUMENT COMMUNICATION POLICY TO GET INFORMATION ACROSS
TO THE CONSUMERS SALES FOLDERS ADVERTISEMENTS IN LOCAL
NEWSPAPERS ETC $O NOT FORGET TO SPEAK TO CONSUMERS IN AN
EMOTIVE WAY IN ORDER TO PUT THE MESSAGE ACROSS TO THEM
Q /RGANIC QUALITY AS THE ONLY SALES ARGUMENT IS NOT SUFlCIENT
FOR MANY CONSUMERS
Q 2EDUCING PREJUDICE DEVELOPING A BOND TOWARDS ORGANIC
PRODUCTS FREE SAMPLES OR REDUCED PRICE OFFERS AS INITIATORS
OF ORGANIC CONSUMPTION IS HELPFUL
Q 0ERSONALISATION OF OFFER INITIATING REAL OR SIMULATING PERSON
AL CONTACT THUS HELPING PEOPLE TO OVERCOME THEIR MISTRUST THE OFFER SHOULD
"UILD A RELATIONSHIP OF TRUST WITH THE CONSUMER @/PEN DAY BE PERSONALIZED
AT THE FARM
Q )NCREASING THE QUANTITIES SUPPLIED AND IMPROVING AVAILABIL
ITY FOR A BROAD CONSUMER GROUP IS NECESSARY
Q $IVERSIFY THE CURRENT RANGE OF ORGANIC FOOD PARTICULARLY
WITH REGARD TO CONVENIENCE PRODUCTS
Q ! BETTER COVERAGE OF NEW DISTRIBUTION CHANNELS IS RECOM
MENDED /RGANIC INDUSTRY MUST lND ITS OWN ANSWER TO
THE FAST FOOD TREND PERHAPS BY OPENING SNACK BARS OFFERING
HEALTHY FAST FOOD
Q &RESHNESS AND QUALITY FROM THE REGION OFFER A BIG OPPORTU
NITY FOR /-)S #ONSUMERS OFTEN ASSOCIATE FRESHNESS WITH
REGIONAL ORIGIN 2EGIONAL SPECIALITIES OFTEN STAND FOR QUALITY
&RESHNESS AND QUALITY CAN HELP OVERCOME BARRIERS RELATING TO
FOOD AS ENJOYMENT SEE CHAPTER
&OR A DEEPER INSIGHT SEE THE /-)A2$ PUBLICATION 6OLUME 4HE %UROPEAN #ONSUMER
AND /RGANIC &OOD 5NIVERSITY OF 7ALES 3CHOOL OF -ANAGEMENT AND "USINESS !BERYST
WYTH 5+ HTTPWWWIRSABERACUKOMIARDPUBLICATIONSINDEXHTML

#ONSUMER ATTITUDES TOWARDS REGIONAL ORGANIC

PRODUCTS
)N MOST %5 COUNTRIES THERE IS A GENERAL AGREEMENT THAT THE ORIGIN OF

FOOD PRODUCTS IS IMPORTANT AND LOCAL PRODUCE IS PREFERRED BY THE CON
SUMER 4HIS HOLDS TRUE ABOVE ALL FOR FRESH PERISHABLE PRODUCTS LIKE
FRUIT AND VEGETABLES MILK AND MEAT PRODUCTS AND APPLIES TO ORGANIC
AND TO CONVENTIONAL FOOD (OWEVER FOR SOME CONSUMERS THE CONCEPT
OF LOCAL PRODUCTION PROCESSING AND DISTRIBUTION IS EVEN MORE RE
LEVANT WHEN THEY CONSIDER ORGANIC PRODUCTS
#ONSUMERS MAINLY ASSOCIATE LOCALREGIONAL ORIGIN WITH THE FOL
LOWING ATTRIBUTES
CONSUMER Q PRODUCT QUALITY FRESHNESSSHELF LIFE PURITY

ASSOCIATION TO Q SOMETHING FRIENDLY AND SMALL SPECIlC CHARACTERISTICS
LOCAL REGIONAL Q TRUST
ORIGIN Q LOYALTY TO ONES OWN REGION AND
Q ENVIRONMENTAL ISSUES THE REDUCTION OF TRAFlC AS SUCH RE
DUCTION OF FOOD MILES REDUCED POLLUTION
0RODUCT QUALITY IS AN IMPORTANT TOPIC AS REGARDS REGIONAL PRO

DUCTION #ONSUMERS ASSOCIATE THE ATTRIBUTES FRESHNESS AND SHELF LIFE
WITH BEING A DIRECT CONSEQUENCE OF SHORTER TRANSPORTATION 0RODUCT
QUALITY IS ALSO SEEN AS A RESULT OF THE PRODUCTS BEING FARMED AND
PROCESSED IN A SPECIlC REGION WITH SPECIlC CHARACTERISTICS 4RUST IS
ALSO IMPORTANT FOR CONSUMERS )T IS HUMAN NATURE TO TRUST SOMETHING
THAT SOUNDS OR LOOKS FAMILIAR RATHER THAN SOMETHING UNKNOWN 3OCIAL
PROXIMITY TO THE HOME REGION IS ALSO AN IMPORTANT MOTIVE #ONSU
MERS STATE THAT THEY ACT ON GROUNDS OF LOYALTY TOWARDS THEIR OWN
REGION WHICH IS COMPLEMENTARY TO TRUST RELATED ASPECTS TOO
3OME REGULAR CONSUMERS NOTABLY IN THE 5+ AND 'ERMANY
CONFESS THAT THEORY AND PRACTICE ARE DIFFERENT ASPECTS OF THE TOPIC
#ONSEQUENTLY THEY ADMIT TO THEMSELVES AND ASSUME THAT FOR OTHERS
TOO ADHERENCE TO ORIGIN IS THEORETICALLY AN IMPORTANT AND EMINENTLY
WORTHY TOPIC BUT IN REALITY IT IS OFTEN NOT AMONG THE DECISIVE FACTORS
WHEN PURCHASING )T MAY BE ASSUMED THAT THE SAME IS THE CASE IN
OTHER COUNTRIES TOO 4HIS STATEMENT LEADS TO FACTORS WHICH MODERATE
THE SIGNIlCANCE OF PRODUCT ORIGIN ! COMMON DENOMINATOR SEEMS TO
BE THAT WHEN CONSUMERS SEE THEIR CHOICES AND COMFORT BEING LIMITED

#ONSUMERS AND REGIONAL PRODUCTS
THEY MAKE CONCESSIONS REGARDING WHAT THEY UNDERSTAND BY ORIGIN

4HIS MEANS THAT THEY COMPROMISE ON TROPICAL FRUIT AND SUPPLEMENT
WHAT WOULD OTHERWISE BE A STRONG SEASONAL RESTRICTION -OREOVER
'ERMAN AND &RENCH CONSUMERS STATE THAT THE QUALITY IMAGE AND TASTE
OF PRODUCTS IS OFTEN MORE IMPORTANT THAN WHERE THEY COME FROM
!NOTHER POINT REVEALED BY !USTRIANS AND PARTLY SUPPORTED BY "RITISH
AND )TALIAN CONSUMERS IS THAT IF THERE WERE A COMMON %5 WIDE
LABEL FOR ORGANIC PRODUCTS ORIGIN WOULD LOSE ITS SIGNIlCANCE WHEN
BUYING ORGANIC
&OR SOME ORGANIC CONSUMERS

THE ORIGIN %5 IS ALREADY SUFlCIENT
4HE PREVAILING ATTITUDE IN ALL COUNTRIES SHOWS THAT THERE IS A ACCEPTANCE OF

GENERAL DISTRUST OF FOREIGN ORGANIC PRODUCTS RESULTING FROM UN /-)S FROM
CERTAINTY REGARDING ORGANIC REGULATION AND CERTIlCATION IN FOREIGN OTHERFOREIGN
COUNTRIES 4HE MAJORITY OF CONSUMERS HAVE NO KNOWLEDGE ABOUT REGIONS
CONDITIONS ELSEWHERE WHICH OFTEN LEADS TO A LACK OF TRUST IN FOREIGN
PRODUCTION PRACTICE
!NOTHER FACTOR IMPEDING THE ACCEPTANCE OF IMPORTED ORGANIC
PRODUCTS IS THE APPARENT CONTRADICTION BETWEEN ORGANIC FARMING
VALUES AND FOOD MILES !LSO OFTEN STATED AS A DECISIVE FACTOR IN PUR
CHASE DECISIONS IS THE WISH TO EXPRESS DISAPPROVAL OF OTHER COUNTRIES
POLITICS ANDOR ETHNIC ATTITUDE BY MEANS OF BOYCOTTING PRODUCTS FROM
THOSE COUNTRIES )NDEED THE MOST RELEVANT FACTOR FOR THE SUCCESS OR
FAILURE OF FOREIGN PRODUCTS SEEMS TO BE THE PREVAILING IMAGE OF A
COUNTRY OR REGION WITH REGARD TO CERTAIN PRODUCTS !S LONG AS A GENER

ALLY POSITIVE COUNTRY IMAGE OR CHARACTERISTICS OF A POSITIVE COUNTRY

IMAGE ARE IN LINE WITH CERTAIN PRODUCTS OR PRODUCT CHARACTERISTICS n OR
CAN BE TRANSFERRED TO A PRODUCT n THE ANTICIPATION OF GOOD QUALITY AND
TASTE OUTWEIGHS POSSIBLE RESERVATIONS REGARDING THE FOREIGN ORIGIN OF
ORGANIC FOOD &URTHERMORE THERE IS A COUNTRY SPECIlC REPUTATION FOR
CERTAIN PRODUCTS WHICH PROMOTES SALES OF THOSE PRODUCTS IN FOREIGN
COUNTRIES A CLASSIC EXAMPLE IS )TALIAN PASTA )NDICATED BY ALMOST ALL
CONSUMERS EXCEPT $ANISH AND 5+ IS ACKNOWLEDGMENT OF IMPORTS
OF PRODUCTS THAT CANNOT BE FARMED DOMESTICALLY EG DUE TO CLIMATIC
RESTRICTIONS OR WHERE DEMAND IS HIGHER THAN LOCAL OR NATIONAL OUT
PUT
/THER FACTORS ENHANCING THE SUCCESS OF FOREIGN FOOD PRODUCTS
ARE DETAILED INFORMATION ABOUT THE PRODUCER PRODUCT QUALITY AND
PRICES "ACKGROUND INFORMATION AND REASSURANCE ABOUT THE CREDIBI
LITY OF THE RELEVANT LABELLING SCHEME ARE ALSO EXPECTED
!LL CONSUMERS INVOLVED IN REGIONS IN THE /-)A2$ PROJECT CASE

/-)S INmUENCE STUDIES RECOGNISED THE POSITIVE IMPACT OF THE ORGANIC MARKETING INI
ON THE REGION TIATIVE ON THE REGION &IRSTLY THEY PONDERED ON GENERAL ASPECTS LIKE
/-)S CONTRIBUTION TO THE REGIONS ECONOMY IN TERMS OF EMPLOYMENT
AND FURTHER ECONOMIC BENElTS AS WELL AS ON THE ENVIRONMENTAL IM
PACT REDUCING OF FOOD MILES ENVIRONMENTALLY FRIENDLY FARMING TECH
NIQUES !DDITIONALLY HOWEVER ORGANIC MARKETING INITIATIVES ARE ALSO
ASSOCIATED WITH ASPECTS THAT WOULD BE EXPECTED LESS OFTEN WITH OTHER
CONVENTIONAL TYPES OF ORGANISATION IN THE FOOD INDUSTRY
Q PROVIDING NEW OPPORTUNITIES FOR TOURISM

Q MOTIVATING THE CATERING INDUSTRY TO USE ORGANIC PRODUCE
Q PRESERVING CULTURE AND TRADITION
Q CONTRIBUTING TO AWARENESS OF LOCAL FOOD ISSUES
Q MAINTAINING A SENSE OF COMMUNITY AND PROVIDING GOOD
EXAMPLES FOR OTHER ORGANISATIONS n STIMULATING THEM TO CON
VERT TO ORGANIC PRODUCTION SYSTEMS
4HIS CHAPTER SHOWS THAT LOCAL PRODUCTION IS AN IMPORTANT ISSUE

CONSEQUENCES FOR MANY CONSUMERS ESPECIALLY REGARDING FRESH AND PERISHABLE PROD
FOR /-)S UCTS LIKE FRUIT VEGETABLES MILK AND MEAT 4HE /-) SHOULD TRY TO PAY
ATTENTION TO THE lVE MAIN ATTRIBUTES THAT CONSUMERS ASSOCIATE WITH
REGIONAL ORIGIN SEE THE BEGINNING OF THIS CHAPTER 4HESE SHOULD ALSO

#ONSUMERS AND REGIONAL PRODUCTS
BE THE MAIN ATTRIBUTES OF THE /-)S PRODUCTS &IGURE P SHOWS

THE MAIN ATTRIBUTES AND THE POSSIBILITIES FOR THE /-)
-ARKETING INSTRUMENTS ARE VERY IMPORTANT AT THIS POINT )N USING REGIONAL

TERMS OF COMMUNICATION STRATEGY REGIONAL ORIGIN SHOULD BE A KEY ORIGIN IN
ASPECT )T IS IMPORTANT TO SIGNAL CLEARLY ON THE PRODUCT THAT IT IS PRO MARKETING
DUCED IN THE REGION
)NTERACTION OF INSTRUMENTS IS ALSO CRUCIAL TO ACHIEVE THE CON
SUMERS EXPECTATIONS &OR EXAMPLE A KEY FACTOR INmUENCING THE
FRESHNESS OF A PRODUCT IS DISTRIBUTION POLICY ! WELL THOUGHT OUT
DISTRIBUTION POLICY IS IMPORTANT IN ORDER TO GET THE PRODUCT TO THE
CONSUMER AS FRESH AS POSSIBLE ! WELL THOUGHT OUT COMMUNICATION
POLICY IS NECESSARY TO COMMUNICATE THE FRESHNESS TO THE CONSUMER
SEE ALSO CHAPTER
4HE QUESTION OF WHETHER THE /-) SHOULD SELL ITS PRODUCTS PRI SUPPLY WHICH
MARILY ON THE NATIONAL OR INTERNATIONAL MARKET IS DIFlCULT TO ANSWER MARKETS
4HE /-) SHOULD TRY lRSTLY TO BUILD UP OR RATHER TO SUPPLY A REGIONAL
MARKET /FTEN IT IS DIFlCULT FOR AN /-) TO BE SUCCESSFUL ON THE NATIO
NAL MARKET %XCEPTIONS CAN BE /-)S THAT ARE LOCATED IN A REGION WITH
A POSITIVE IMAGE EG CHEESE FROM THE !LLGØU OR SAUSAGES FROM "AVA
RIA THAT IS WELL KNOWN BEYOND THE BORDERS OF A REGION &AMILIARITY
AND POSITIVE IMAGE OF A REGION ARE NOT THE ONLY FACTORS THAT CAN IN
mUENCE THE NATIONAL SALES POSITIVELY (OWEVER CONCENTRATION ON THE
REGIONAL MARKET SHOULD BE THE lRST PRIORITY FOR THE /-)
&OR A DEEPER INSIGHT SEE THE /-)A2$ PUBLICATION 6OLUME 4HE %UROPEAN #ONSUMER
AND /RGANIC &OOD 5NIVERSITY OF 7ALES 3CHOOL OF -ANAGEMENT AND "USINESS !BERYST
WYTH 5+ HTTPWWWIRSABERACUKOMIARDPUBLICATIONSINDEXHTML

-AIN BUYING MOTIVES FOR REGIONALLY PRODUCED ORGANIC FOOD

AND CONSEQUENCES FOR /-) MARKETING
PRODUCE HIGH QUALITY
PRODUCT QUALITY
SELL FRESH PRODUCTS
SOMETHING FRIENDLY PRODUCE SPECIFIC PRODUCTS

AND SMALL EG REGIONAL SPECIALITIES
BUILD UP TOTAL TRANSPARENCY n

EG GIVE CONSUMERS THE POSSIBILITY
TRUST TO VIEW THE WHOLE
PRODUCTION CHAIN
COMMUNICATE TO THE CONSUMER

THE CONTRIBUTION OF THE /-)
LOYALTY TO ONEgS TO THE REGION
OWN REGION EG ADDITIONAL EMPLOYMENT
ENVIRONMENTAL PROTECTION
COMMUNICATE TO THE CONSUMER

THE CONTRIBUTION OF THE /-)
ENVIRONMENTAL ISSUES
REGARDING THE ENVIRONMENT
EG REDUCTION OF FOOD MILES
&IGURE -AIN BUYING MOTIVES FOR REGIONALLY PRODUCED ORGANIC FOOD AND CONSEQUENCES FOR /-) MARKETING

%5 SUPPORT POLICIES
%5 SUPPORT POLICIES FOR RURAL DEVELOPMENT
4HE MAJOR POLICIES OF THE %5 THAT TOUCH ON ISSUES OF RURAL DEVE AGRICULTURAL
LOPMENT ARE DIVIDED INTO AGRICULTURAL POLICY AND REGIONAL POLICY POLICY AND
PROGRAMMES 7ITHIN AGRICULTURAL POLICY THERE HAS BEEN RECENTLY A REGIONAL POLICY
PRONOUNCED SHIFT FROM PRODUCT RELATED PAYMENTS TO RURAL DEVELOP PROGRAMMES
MENT THE SO CALLED ND PILLAR OF THE #!0 THE #OMMON !GRICULTURAL
0OLICY OF THE %UROPEAN 5NION 4HIS HAS BEEN A CENTRAL GOAL OF THE
#!0 REFORM OF .OW A SINGLE PAYMENT SCHEME LARGELY DECOU
PLED FROM SUPPORT OF AGRICULTURAL PRODUCTION IS LINKED TO ISSUES OF
ENVIRONMENTAL FOOD SAFETY ANIMAL AND PLANT HEALTH AND ANIMAL WEL
FARE CONCERNS SO CALLED @CROSS COMPLIANCE 4HE RESULTING REDUCTION
IN DIRECT PAYMENTS FOR BIGGER FARMS IS INTENDED TO BE USED TO lNANCE
THE NEW RURAL DEVELOPMENT POLICY HTTPEUROPAEUINTCOMM
AGRICULTUREMTRINDEX?ENHTM
4HESE CHANGES SHOW A MOVE TOWARDS GOALS ALREADY PURSUED BY
/-)S IN THE PAST )T IS THEREFORE EXPECTED THAT THE ORGANIC FOOD SECTOR
AND /-)S IN PARTICULAR COULD INCREASINGLY BECOME BENElCIARIES OF
THIS POLICY 7E THEREFORE TRY TO PRESENT A BRIEF OVERVIEW OF THE MAIN
PROGRAMMES AND MEASURES THAT COULD BE ADDRESSED BY /-)S
)N THE BUDGET THE %5 ALLOCATES SOME BILLION THE 3TRUCTURAL
%UROS TO REGIONAL AID 4WO THIRDS OF THE FUNDS GO TO THE SO CALLED &UND
@/BJECTIVE REGIONS DElNED AS THOSE WITH A PER CAPITA GROSS DOMES
TIC PRODUCT '$0 AT PURCHASING POWER PARITY 000 EXCHANGE RATES
OF LESS THAN PERCENT OF THE %5 AVERAGE !NOTHER TO PERCENT
EACH GOES TO REGIONS THAT ARE NOT NECESSARILY POOR BUT ARE SUFFERING
FROM THE RESULTS OF STRUCTURAL CHANGE /BJECTIVE OR REGIONAL LABOUR
MARKET PROBLEMS /BJECTIVE
4HE %5 SPENDS ANOTHER BILLION %UROS THROUGH THE COHESION
FUNDS ON TRANSPORT AND ENVIRONMENTAL PROJECTS IN COUNTRIES WHOSE
PER CAPITA '$0 IS LESS THAN PERCENT OF THE %5 AVERAGE 4HE COHE
SION FUNDS ARE DIFFERENT FROM OTHER REGIONAL SUPPORT IN THAT THEY ARE
GIVEN TO COUNTRIES RATHER THAN REGIONS AND THEY DO NOT REQUIRE CO
lNANCING OUT OF NATIONAL BUDGETS
%ACH NATIONAL GOVERNMENT DRAWS UP A MULTI YEAR DEVELOPMENT
PROGRAMME AS A FRAMEWORK FOR REGIONAL AID /NCE THE %UROPEAN
#OMMISSION HAS ACCEPTED THIS PROGRAMME THE CENTRAL GOVERNMENT
TOGETHER WITH REGIONAL AND LOCAL AUTHORITIES IDENTIlES PROJECTS THAT

IT WANTS TO BE CO lNANCED BY THE %5 IN THE FOLLOWING AREAS A IN

FRASTRUCTURE THAT IS TRANSPORT ENERGY TELECOMMUNICATIONS AND THE
ENVIRONMENT B SUPPORT FOR LOCAL COMPANIES C TRAINING FOR WORK
ERS AND D RESEARCH AND DEVELOPMENT
3EVERAL FUNDS ARE IN FACT GROUPED UNDER THE BANNER OF %5
3TRUCTURAL &UNDS 4HESE ARE
Q 4HE %UROPEAN 2EGIONAL $EVELOPMENT &UND %2$& WHICH

AIMS TO REDUCE THE GAPS IN DEVELOPMENT BETWEEN THE 5NIONS
REGIONS
Q 4HE %UROPEAN 3OCIAL &UND %3& WHICH HAS THE TASK OF IM
PROVING EMPLOYMENT PROSPECTS IN THE 5NION
Q 4HE %UROPEAN !GRICULTURAL 'UIDANCE AND 'UARANTEE &UND
%!''& WHICH ASSISTS IN PART lNANCING NATIONAL AGRICULTURAL
AID SCHEMES AND IN DEVELOPING AND DIVERSIFYING THE #OMMUNI
TYS RURAL AREAS
Q 4HE &INANCIAL )NSTRUMENT FOR &ISHERIES 'UIDANCE &)&'
WHICH ASSISTS IN THE RESTRUCTURING OF THE lSHERIES SECTOR
)N ADDITION THE %5 FUNDS FOUR SO CALLED #OMMUNITY )NITIATIVES

RELATING TO INTERREGIONAL CO OPERATION URBAN DEVELOPMENT AND RURAL
DEVELOPMENT /F THESE IT IS MAINLY THE ,%!$%2 AND ).4%22%'
PROGRAMMES THAT ARE IMPORTANT IN TERMS OF RURAL DEVELOPMENT
7HICH %5 PROGRAMMES CAN BE OF MAJOR RELEVANCE FOR /-)S

/F THE %5 PROGRAMMES UNDER THE 3TRUCTURAL &UNDS THERE ARE THREE
MAIN MEASURES THAT CAN BE OF MAJOR IMPORTANCE FOR /-)S
ARTICLE Q -EASURES RELATING TO !RTICLE SO CALLED AFTER THE ND TREATY
MEASURES ESTABLISHING THE %UROPEAN #OMMUNITY CONCLUDED IN 2OME
WHERE AGRICULTURAL MATTERS ARE MENTIONED IN THE ARTICLES
n
)N THE COURSE OF REFORMING THE #OMMON !GRICULTURAL 0OLICY

#!0 IN ONE AIM WAS TO ACCOUNT FOR THE PECULIARITIES IN AGRI
CULTURE ALL OVER %UROPE CONNECTED TO THE COUNTRY SPECIlC SOCIAL CON
TEXTS AS WELL AS THE DIFFERENT STRUCTURAL AND ENVIRONMENTAL REALITIES
OF AGRICULTURAL PRODUCTION )T WAS THEREFORE NECESSARY TO DIFFERENTIATE
AGRICULTURAL SUPPORT MEASURES FROM %5 LEVEL DOWN TO NATIONAL OR

%5 SUPPORT POLICIES
EVEN REGIONAL LEVEL 'OVERNMENT SUPPORT MUST BE IN LINE WITH ONE OF

THE MAIN PRINCIPLES OF THE %5 NAMELY FREE AND UNDISTORTED COMPETI
TION 4HE %5 PROPOSED THE FOLLOWING GUIDELINES FOR GOVERNMENT SUP
PORT CONCERNING AGRICULTURE EXCERPT OF THOSE RELEVANT FOR /-)S
Q AIDS FOR INVESTMENTS ON FARMS CAN NORMALLY BE PERMITTED AT

UP TO OF ELIGIBLE EXPENSES OR IN THE LESS FAVOURED
AREAS SIMILARLY AIDS FOR INVESTMENTS IN THE PROCESSING AND
MARKETING OF AGRICULTURAL PRODUCTS CAN NORMALLY BE PERMIT
TED AT RATES OF UP TO WITH A INCREASE FOR /BJECTIVE
AREAS PROVIDED THAT IT CAN BE SHOWN THAT NORMAL MARKET
OUTLETS EXIST FOR THE PRODUCTS CONCERNED
Q AIDS GRANTED IN RETURN FOR AGRI ENVIRONMENTAL UNDERTAKINGS
GIVEN BY FARMERS AND OTHER ENVIRONMENTAL AIDS
Q AIDS TO COMPENSATE FOR HANDICAPS IN LESS FAVOURED AREAS
Q AIDS FOR THE ESTABLISHMENT OF PRODUCER GROUPS
Q AIDS TO ENCOURAGE THE PRODUCTION AND MARKETING OF QUALITY
AGRICULTURAL PRODUCTS THE PROVISION OF TECHNICAL SUPPORT FOR
PRODUCERS AND THE IMPROVEMENT OF THE GENETIC QUALITY OF
LIVESTOCK
SEE HTTPEUROPAEUINTCOMMAGRICULTURESTATEAIDBACK?
ENHTM
4HE IMPLEMENTATION OF THESE SUPPORT MEASURES IS REGULATED BY

PARTICULAR %5 PROGRAMMES OR NATIONAL PROGRAMMES WHICH ARE AP
PROVED BY THE $' $IRECTORATE 'ENERAL FOR !GRICULTURE
,%!$%2 IS AN ACRONYM MEANING ,IASON %NTRE !CTIONS DE MEASURES

$£VELOPPEMENT DE L%CONOMIE 2URAL &OLLOWING ON FROM THE ,%!$ UNDER THE %5
%2 ) AND )) PROGRAMMES THE THIRD PROGRAMME PERIOD n PROGRAMME
IS CALLED ,%!$%2 ,%!$%2
4HE ,%!$%2 PROGRAMME ALSO lNANCED OUT OF THE 3TRUCTURAL

&UNDS AIMS TO SUPPORT ALL KINDS OF ACTORS IN RURAL AREAS TO IMPROVE
THEIR CURRENT POSITION )T IS SOMETIMES TERMED A PANn%UROPEAN LABO
RATORY FOR RURAL INNOVATION )T THEREFORE INCLUDES SUPPORT FOR INTEGRA
TIVE HIGH QUALITY AND INNOVATIVE STRATEGIES FOR A SUSTAINABLE REGIONAL
DEVELOPMENT CONCENTRATING ON PARTNERSHIPS AND THE ESTABLISHMENT
OF EFFECTIVE NETWORKS 4HE ,%!$%2 PROGRAMME IS PERCEIVED AS A

REGIONALLY BASED PARTICIPATIVE AND INTEGRATIVE BOTTOM UP APPROACH

FOR THE SUSTAINABLE DEVELOPMENT OF RURAL AREAS 4HE PROGRAMME
THEREFORE FOCUSES ON THE FOLLOWING THEMES
Q MAKING THE BEST USE OF NATURAL AND CULTURAL RESOURCES IN
CLUDING ENHANCING THE VALUE OF SITES
Q IMPROVING THE QUALITY OF LIFE IN RURAL AREAS
Q ADDING VALUE TO LOCAL PRODUCTS IN PARTICULAR BY FACILITATING
ACCESS TO MARKETS FOR SMALL PRODUCTION UNITS VIA COLLECTIVE
ACTIONS
Q THE USE OF NEW KNOW HOW AND NEW TECHNOLOGIES TO MAKE
PRODUCTS AND SERVICES IN RURAL AREAS MORE COMPETITIVE
SEE HTTPEUROPAEUINTCOMMAGRICULTURERURLEADERPLUS
INDEX?ENHTM
3UPPORT IS GRANTED NOT ONLY FOR INVESTMENT BUT ALSO FOR TECHNI
CAL ASSISTANCE REQUIRED ,%!$%2 PLACES SPECIAL EMPHASIS ON NET
WORKING AND EXCHANGE OF EXPERIENCE BETWEEN ,%!$%2 REGIONS
).4%22%' ))) PROGRAMME IS AIMED AT INTENSIFYING AND IM

MEASURES UNDER PROVING THE CROSS BORDER CO OPERATION OF REGIONS WITHIN %UROPE
THE %5 CONCENTRATING EITHER ON A TRANSNATIONAL NATIONAL OR INTERREGIONAL LE
PROGRAMME VEL 4HE TOTAL SUPPORT OFFERED BY THE %UROPEAN 2EGIONAL $EVELOPMENT
).4%22%' &UND %2$& FOR THE NEW INITIATIVE WILL BE MILLION %UROS FOR
THE PERIOD 4HE INITIATIVE IS DIVIDED INTO THREE SECTIONS
Q 3ECTION ! CONCERNS CROSS BORDER CO OPERATION THAT IS THE
PROMOTION OF INTEGRATED REGIONAL DEVELOPMENT BETWEEN
BORDERING REGIONS
Q 3ECTION " CONCENTRATES ON CROSS NATIONAL CO OPERATION CON
TRIBUTING TO AN INTEGRATED AND HARMONIOUS TERRITORY ACROSS
THE %UROPEAN 5NION
Q 3ECTION # AIMS TO REINFORCE INTERREGIONAL CO OPERATION AND
TO IMPROVE THE POLICIES AND TECHNIQUES OF INTERREGIONAL ECO
NOMIC DEVELOPMENT
SEE HTTPEUROPAEUINTCOMMREGIONAL?POLICYSOURCES
DOCOFlCOFlCIALGUIDELINESINDEX?ENHTM
4HE POSSIBILITIES OFFERED BY THESE THREE %UROPE WIDE PRO

GRAMMES DIFFER IN THEIR USEFULNESS FOR /-)S MAINLY WITH REGARD TO
THEIR FOCUS AND SCOPE

%5 SUPPORT POLICIES
4HE %5 PROGRAMMES ,%!$%2 AND ).4%22%' ARE IMPORTANT IN TERMS OF RURAL DEVELOP
MENT 0HOTO 9 2EISNER
!RTICLE MEASURES AIM TO DIRECTLY SUPPORT THE ACTIVITIES OF THE POTENTIAL OF

/-) ITSELF GRANTING INVESTMENT AIDS FOR IMPROVING THE PROCESSING PROGRAMMES
AND MARKETING SITUATION FOR THE /-)
,%!$%2 AND ).4%22%' FOLLOW A TERRITORIAL APPROACH AIM
ING TO STRENGTHEN THE INSTITUTIONAL ENVIRONMENT OF A REGION THROUGH
INTER SECTORAL NETWORKS AND CO OPERATION

!S BOTH INTEGRATION ALONG THE SUPPLY CHAIN AND REGIONAL NET

WORKING HAVE BEEN FOUND TO BE CRUCIAL FOR THE SUCCESSFUL DEVELOP
MENT OF AN /-) ALL THREE PROGRAMMES MENTIONED HAVE THE POTENTIAL
TO CONTRIBUTE TO THE SUCCESSFUL ESTABLISHMENT AND FURTHER DEVELOP
MENT OF /-)S EACH IN A SPECIlC WAY 7HILE !RTICLE MEASURES
CAN HELP TO COVER lNANCIAL SHORTFALLS DURING THE START UP PHASE THE
,%!$%2 AND ).4%22%' INITIATIVES CAN PROVIDE A LINK INTO THE
RURAL DEVELOPMENT DIMENSION 4HIS IN TURN CAN ASSIST THE LONG TERM
DEVELOPMENT OF THE BUSINESS
4HE REQUIREMENTS FOR PARTICIPATION IN THESE PROGRAMMES ARE

(OW CAN /-)S CLOSELY CONNECTED TO THE FULlLMENT OF CERTAIN STANDARDS
PARTICIPATE #ONCERNING !RTICLE MEASURES ONLY FARM OWNERS WHO FULlL
IN THESE REQUIREMENTS RELATING TO TECHNICAL QUALIlCATIONS CERTAIN INCOME LIM
PROGRAMMES ITS AND OBJECTIVE EVIDENCE OF THE ECONOMIC EFlCIENCY OF THE PROJECT
CAN PARTICIPATE 3UPPORT IS OPEN TO INDIVIDUALS AND GROUPS
!S FOR ,%!$%2 AND ).4%22%' PROJECTS INITIATIVES USUALLY
CUT ACROSS ECONOMIC SECTORS 4HEIR PROJECT PROPOSALS HAVE TO FULlL
SPECIAL REQUIREMENTS AND BE APPROVED BY NATIONAL AND INTERNATIONAL
ASSESSMENT
4HERE IS CONSIDERABLE VARIATION WITHIN THE -EMBER 3TATES ON
THE SPECIlC TARGETS OF THE MEASURES SUPPORTED 'IVEN THAT FOR LAY
PERSONS IT IS QUITE DIFlCULT TO GAIN AN OVERVIEW OF THE BROAD RANGE
OF SUPPORT AVAILABLE AT REGIONAL NATIONAL AND %UROPEAN LEVEL THE
MOST EFFECTIVE WAY FOR /-)S TO OBTAIN COUNTRY SPECIlC INFORMATION
ON SUPPORT POSSIBILITIES IS TO CONTACT THE TECHNICAL ADVISORY SERVICES
OF REGIONAL INSTITUTIONS 4HESE MAY BE SECTORAL INSTITUTIONS SUCH AS
CHAMBERS OF AGRICULTURE OR ORGANIC FARMERS ASSOCIATIONS OR REGIONAL
INSTITUTIONS SUCH AS THE RELEVANT OFlCES IN REGIONAL GOVERNMENT OR
REGIONAL DEVELOPMENT AGENCIES
#LOSE NETWORKING WITH THE VARIOUS INSTITUTIONAL STAKEHOLDERS IN
THE AGRICULTURAL SECTOR AND IN THE REGION SEEMS TO BE A CRUCIAL ASPECT
FOR ADEQUATE INFORMATION AS WELL AS FOR THE GENERAL SUPPORT OF THE
/-)
0UBLIC SUPPORT FOR /-)S BY DIRECT PAYMENTS OR SUBSIDIES

ON INTEREST RATES FOR /-)S IS ALWAYS TWO SIDED IT CAN BE POSITIVE AS
WELL AS NEGATIVE 4HE POSITIVE INTENTIONS OF PUBLIC SUPPORT ARE OB
VIOUS

%5 SUPPORT POLICIES
Q &INANCIAL SUPPORT IN THE START UP PHASE SEEMS TO BE AN EFFEC BENElTS AND

TIVE INSTRUMENT FOR REDUCING ECONOMIC RISK FOR THE INDIVIDU DISADVANTAGES OF
AL MEMBER 4HIS CAN OVERCOME BARRIERS TO FARMER PARTICIPA PUBLIC SUPPORT
TION )N MANY OF THE CASES EXAMINED PUBLIC SUPPORT AT THE
BEGINNING WAS CONSIDERED A CRUCIAL ASPECT FOR ESTABLISHING
THE /-)
Q !NOTHER POSITIVE POINT CONNECTED TO PUBLIC SUPPORT IS THE
REQUIREMENT TO DRAW UP A REALISTIC AND VIABLE BUSINESS PLAN
FOR THE PROJECT WHICH HAS TO BE CROSS CHECKED AND APPROVED
BY AN INDEPENDENT AUTHORITY 4HIS FORCES FARMERS TO VIEW
THEIR PROJECT THROUGH AN ECONOMIC LENS 3OMETIMES THIS IN
VOLVES PROFESSIONAL ASSISTANCE FROM OUTSIDE WHICH IN GENERAL
INCREASES THE CHANCES OF SUCCESS
Q )NCREASED CONTACT WITH REGIONAL AGENCIES WHICH CAN BE
INSTRUMENTAL IN TERMS OF INFORMATION ABOUT POSSIBLE SUP
PORT MEASURES OR ASSISTING WITH THEIR IMPLEMENTATION ALSO
OFTEN LEADS TO CLOSER INTEGRATION OF THE PROJECT INTO REGIONAL
NETWORKS !LTHOUGH KNOWLEDGE OF OTHER INITIATIVES IS NOT
A GUARANTEE FOR FURTHER CO OPERATION IT IS A PRECONDITION
,%!$%2 AND ).4%22%' ESPECIALLY AIM TOWARDS ESTAB
LISHING INFORMATIVE AND EFFECTIVE NETWORKING STRUCTURES NOT
ONLY WITHIN BUT EVEN BETWEEN REGIONS
!SIDE FROM THESE EFFECTS PUBLIC SUPPORT CAN ALSO LEAD TO NEGATIVE
RESULTS
Q &IRST OF ALL IT CAN SERVE AS A PULL FACTOR TO CREATE PROJECTS THAT

ARE NOT SUPPORTED WHOLEHEARTEDLY BY THE TARGET GROUP 3UCH
PROJECTS ARE OFTEN STARTED FROM THE TOP DOWN SO AS @NOT TO
MISS OUT ON THE FUNDING OPPORTUNITY BUT THERE IS NO IM
MEDIATE INTEREST ON THE PART OF THE FARMERS CONCERNED
Q 3ECONDLY THE PROSPECT OF lNANCIAL SUPPORT CAN LEAD TO
EXAGGERATED INVESTMENTS WITHOUT SOUND CALCULATION OF THE
ECONOMIC RETURNS .ORMALLY DURING THE START UP PHASE
INVESTMENT IS NEEDED MAINLY FOR EQUIPMENT )NITIATIVES
SOMETIMES TEND TO LOOK OVER OPTIMISTICALLY AT THEIR BUSINESS
DEVELOPMENT AND INVEST DISPROPORTIONATELY IN WHAT AFTER
WARDS TURNS OUT TO BE MORE OR LESS INmEXIBLE CAPITAL
Q 4HIS PROBLEM IS NOT RELATED ONLY TO INVESTMENT 3OMETIMES

THE CALCULATION IS BASED ON CONTINUOUS SUPPORT RATHER THAN

ON INITIAL ASSISTANCE THAT IS GRADUALLY PHASED OUT 3UCH SUP
PORT ORIENTED BEHAVIOUR ALSO PREVENTS THE DEVELOPMENT OF
AN OWNERSHIP FEELING 7ITHOUT MEMBERS COMMITTING THEM
SELVES TO lNANCIAL CONTRIBUTIONS ANDOR UNPAID LABOUR THE
SUSTAINABILITY OF A PROJECT IS OFTEN ENDANGERED 4HE LIFESPAN
OF SUCH /-)S IS THUS MORE OR LESS LIMITED TO THE SUPPORT
PERIOD
)T IS GENERALLY EASIER TO GAIN SUPPORT FOR MATERIAL INVESTMENTS

LACK OF PUBLIC THAN FOR THE @SOFTWARE SUCH AS AN ADEQUATE NETWORK OF ADVICE AND
FUNDING FOR ASSISTANCE IN BUSINESS MATTERS AS WELL AS IN PROFESSIONAL SKILLS 4HE
NETWORKING /-)A2$ CASE STUDIES HAVE DEMONSTRATED THAT THERE IS STILL A LACK OF
CONSULTANCY AND PUBLIC FUNDING FOR NETWORKING CONSULTANCY AND ADVISORY SYSTEMS
ADVISORY SYSTEMS @SOFT SKILLS ESPECIALLY IN THE START UP PHASE OF /-)S
)T THEREFORE APPEARS TO BE CRUCIALLY IMPORTANT TO ESTABLISH AND

SUSTAIN @ONE STOP ADVISORY BOARDS FOR /-)S WHERE THEY CAN OBTAIN
ADVICE IN ALL MATTERS RELATING TO THEIR BUSINESS %VEN WHERE THE INSTI
TUTIONAL SIDE IS ALREADY INCORPORATED INTO ,OCAL !CTION 'ROUPS ,!'
THROUGH THE ,%!$%2 AND ).4%22%' PROGRAMMES ONE MAJOR
BOTTLENECK IS VERY OFTEN THE CO ORDINATION OF THE VARIOUS INSTITUTIONS
TO lNALLY PROVIDE AN EFFECTIVE NETWORK )N TIMES OF INCREASING TECHNI
CAL SPECIALISATION OF ALL INSTITUTIONS INVOLVED THE EFlCIENCY OF PUBLIC
SUPPORT IS NOT ONLY A QUESTION OF THE AMOUNT BUT ALSO A QUESTION OF
HOW TO ESTABLISH AN ADEQUATE INFORMATION AND CO OPERATION NETWORK
AMONG ALL THESE AGENCIES

3UCCESSFUL MARKETING DEVELOPMENT
0RE START PHASE
6ISION BUSINESS IDEA

! VISION IS A DRAFT OF THE FUTURE ! COMPANY CAN BE EFFECTIVE FOR /-)S SHOULD
A SHORT PERIOD WITHOUT KNOWING WHERE IT WANTS TO BE IN THE LONG KNOW WHERE
TERM )T WILL BE MORE EFFECTIVE HOWEVER IF IT KNOWS WHERE IT AIMS TO THEY WANT TO BE
BE IN THE FUTURE ! VISION PRIMARILY DESCRIBES WHAT THE COMPANY OR IN THE LONG TERM
THE /-) INITIATORS WANT TO ACHIEVE IN THE NEXT OR YEARS
$EPENDING ON THE COMPANY THIS MAY FOR EXAMPLE BE HIGHER PROlT
A BIGGER SHARE OF THE MARKET MAXIMUM CUSTOMER SATISFACTION OR
TO CONTRIBUTE TO THE DEVELOPMENT OF THE REGION 4HE MOST EFFECTIVE
METHOD OF lNDING A VISION IS BRAINSTORMING 4HIS METHOD WILL BE
EXPLAINED LATER IN THIS CHAPTER
4HE VISION GOES TOGETHER WITH A BUSINESS IDEA ! BRIGHT IDEA (OW TO lND A
n THE SOLUTION TO A PROBLEM n IS THE BEGINNING OF THE DEVELOPMENT OF BUSINESS IDEA
SOMETHING NEW 4HIS MAY BE A NEW BUSINESS A NEW PRODUCT SERVICE
MANUFACTURING PROCESS METHOD OF DISTRIBUTION OR ANY OTHER IM
PROVEMENT IN PRODUCING OR SELLING A MARKET SERVICE 4HE QUESTION IS
HOW DOES ONE lND SUCH AN IDEA 4HERE ARE DIFFERENT WAYS AND SOURCES
FOR lNDING A NEW IDEA )N THE FOLLOWING SECTION SEVERAL WAYS OF lND
ING A BRIGHT IDEA ARE OUTLINED
!LL COMPANIES SHOULD PAY CLOSE ATTENTION TO POTENTIAL CUSTOM LISTENING TO

ERS 'OOD IDEAS FOR NEW PRODUCTS OFTEN COME FROM WATCHING AND LIS CUSTOMERS
TENING TO CUSTOMERS 4HIS ATTENTION CAN TAKE THE FORM OF INFORMALLY
MONITORING POTENTIAL IDEAS AND NEEDS OF THE CUSTOMER OR FORMAL
ARRANGEMENTS FOR CUSTOMERS TO HAVE AN OPPORTUNITY TO EXPRESS THEIR
OPINIONS %VEN FRIENDS FAMILY MEMBERS OR ACQUAINTANCES CAN BE
CUSTOMERS IN ONE WAY AND THEY CAN HELP IDENTIFY A NEW BUSINESS IDEA
4HERE ARE MANY ASPECTS THAT NEED TO BE TAKEN INTO CONSIDERATION TO
ENSURE THAT THE IDEA REPRESENTS A LARGE ENOUGH MARKET TO SUPPORT A
NEW BUSINESS
%XISTING COMPANIES ESPECIALLY COMPETITORS CAN ALSO BE AN IN

,ISTENING TO THE CONSUMER NEEDS AND EXPECTATIONS EG WHEN CONDUCTING GUIDED TOURS
0HOTO - 3CHERMER. 'LEIRSCHER
WATCHING AND TERESTING SOURCE OF A GOOD IDEA /-) INITIATORS SHOULD ESTABLISH A
LISTENING TO COM FORMAL METHOD FOR MONITORING AND EVALUATING COMPETITIVE PRODUCTS
PETITORS AND SERVICES ON THE MARKET /FTEN THIS ANALYSIS SHOWS NEW WAYS OF
IMPROVING WHAT IS ON OFFER WHICH MAY RESULT IN A NEW PRODUCT THAT
HAS MORE MARKET APPEAL 3TUDY TRIPS TO OTHER REGIONS OR EVEN TO OTHER
COUNTRIES WILL BE MIND EXPANDING 3UCH TRIPS ALSO PROVIDE STIMULA
TION FOR NEW IDEAS
&URTHERMORE THE DISTRIBUTION CHANNEL IS AN EXCELLENT SOURCE OF

LISTENING TO NEW IDEAS -EMBERS OF DISTRIBUTION CHANNELS KNOW VERY WELL THE CIR
DISTRIBUTION CUMSTANCES AND THE NEEDS OF THE MARKET )T IS POSSIBLE THAT THEY WILL
PARTNERS HAVE GOOD SUGGESTIONS FOR IMPROVING AN EXISTING PRODUCT OR EVEN FOR
A COMPLETELY NEW PRODUCT OR SERVICE
&INALLY SPECIAL SEMINARS FOR ENTREPRENEURS CAN BE VERY HELPFUL

IN lNDING A NEW BUSINESS IDEA

0RE START PHASE
-ILK HERBS AND A MOUNTAIN n A COMBINATION WHICH ATTRACTS MANY CONSUMERS

0HOTO - 3CHERMER. 'LEIRSCHER
@.APFMILCH 3WITZERLAND
-ILK HERBS AND A MOUNTAIN n INNOVATIVE MARKETING OF HERB MILK
PRODUCTS
.APFMILCH IS A LIMITED COMPANY IN (ERGISWIL IN THE .APF MOUNTAIN
AREA IN THE CANTON OF ,UCERNE FOUNDED IN 4HE MOTIVATION FOR
THE FOUNDING OF THIS MARKET INITIATIVE IS CLOSELY CONNECTED WITH THE
DROP IN MILK PRICES DUE TO MARKET LIBERALISATION IN 3WITZERLAND 3OME
FARMERS IN THE .APF REGION DECIDED TO PROCESS THEIR MILK INTO DAIRY
SPECIALITIES IN ORDER TO IMPROVE THEIR INCOMES TO CONTRIBUTE TO THE
DEVELOPMENT OF THE REGION AND TO STRENGTHEN REGIONAL IDENTITY /THER
MAINLY ORGANIC FARMERS HAD ALREADY STARTED TO GROW HERBS AND MEDICI
NAL PLANTS FOR PROCESSING lRMS
4HE INITIATOR AN INNOVATIVE ORGANIC FARMER HAD THE VISION OF COM
BINING THEIR MILK AND HERB PRODUCTION BY MARKETING SPECIAL DAIRY
PRODUCTS WITH LOCAL HERBS UNDER THE NAME OF THEIR MOUNTAIN .APF
(E PERSUADED LARGE RETAIL CHAINS TO SUPPORT THIS PROJECT BY DIRECTLY AP
PROACHING THE MANAGERS RESPONSIBLE WITH CONSIDERABLE SUCCESS
.APFMILCH PRODUCES ORGANIC CREAM CHEESE WITH HERBS ORGANIC YO
GHURTS WITH HERBS MILK AND CURD )N .APFMILCH PROCESSED A
TOTAL OF MN KG OF MILK INTO DAIRY PRODUCTS WITH KG OF THE
MILK BEING PRODUCED ORGANICALLY /VER OF THE BUSINESSS TURNOVER
COMES FROM ORGANIC PRODUCTS 3OURCE &I", &RICK 3WITZERLAND

@"IOALPIN !USTRIA
#REATION OF AN ORGANIC BRAND FOR MOUNTAIN MILK PRODUCTS n @"IO
VOM "ERG ORGANIC FROM THE MOUNTAINS
)N !USTRIA 4YROL IN THE YEAR THE LACK OF OPPORTUNITIES FOR ORGAN
ISED MARKETING OF ORGANIC PRODUCTS IN DISADVANTAGED MOUNTAIN AREAS
LED TO LARGE SCALE RE CONVERSION OF ORGANIC FARMERS BACK TO CONVEN
TIONAL FARMING /UT OF THAT SITUATION THE NEED TO ESTABLISH A COMMON
PLATFORM FOR MARKETING REGIONAL ORGANIC PRODUCE BECAME MORE AND
MORE EVIDENT !DDITIONALLY THERE WAS INCREASING DEMAND FROM A RE
GIONAL RETAIL CHAIN WHICH HAD NOT YET DEVELOPED ITS OWN ORGANIC TRADE
MARK BUT WANTED TO RAISE ITS PROlLE VIS ¸ VIS THEIR BIGGER COMPETITORS
4HIS LED TO THE FOUNDING OF THE ORGANIC UMBRELLA CO OPERATIVE ")/
!,0). ON THE INITIATIVE OF THE REGIONAL ORGANIC FARMERS ASSOCIATION
A CONVENTIONAL MARKETING ASSOCIATION !GRAR -ARKETING 4YROL n !-4
AND VARIOUS INTERESTED ORGANIC FARMERS )NTEGRATING A NUMBER OF AL
READY CONVERTED SMALL DAIRY CO OPERATIVES AN ORGANIC BUTCHER SOME
INNOVATIVE ORGANIC FARMERS AND SUBCONTRACTING THE BIGGEST DAIRY IN
4YROL @4IROL -ILCH FOR ORGANIC FRESH MILK SUPPLY CREATED A WIDE RANGE
OF FURTHER OPTIONS
4HE CO OPERATIVE ESTABLISHED A PRODUCER BASED REGIONAL ORGANIC
BRAND @"IO VOM "ERG 4HIS NEW BRAND WAS PROMOTED VIA MARKET
PARTNERS AND SUITABLE REGIONAL MEDIA 4HE VISION WAS TO ESTABLISH A
STRONG PRODUCER BASED REGIONAL BRAND THAT WOULD NOT BE EXCHANGE
ABLE BY OTHER ORGANIC PRODUCERS OR RETAILERS !NOTHER VISION WAS TO
ADD REGIONAL VALUES AS AN ADVANTAGE FOR EXPORT 4HE INTEGRATION OF
VARIOUS STAKEHOLDERS TO FORM A NETWORK IN PARTICULAR LARGE RETAILERS
AND EXPORT lRMS WILL BE A CRUCIAL ASPECT FOR THE FURTHER DEVELOPMENT
OF THIS /-) 3OURCE 5NIVERSITY OF )NNSBRUCK !USTRIA
-ETHODS OF GENERATING IDEAS

%VEN WITH A WIDE VARIETY OF SOURCES AVAILABLE COMING UP WITH AN IDEA
CAN STILL BE DIFlCULT 3EVERAL SCIENTIlC METHODS CAN HELP TO GENERATE
AND TEST NEW IDEAS 3OME SIMPLE METHODS ARE DESCRIBED IN THE FOL
LOWING SECTION
"RAINSTORMING IS A GROUP METHOD FOR DEVELOPING NEW IDEAS AND

SOLUTIONS 4HE BRAINSTORMING METHOD IS BASED ON THE FACT THAT PEOPLE

0RE START PHASE
CAN BE STIMULATED TO GREATER CREATIVITY BY MEETING WITH OTHERS PARTICI

PATING IN AN ORGANISED GROUP EXPERIENCE )T IS WELL KNOWN THAT MOST
OF THE IDEAS GENERATED BY A BRAINSTORMING SESSION HAVE NO BASIS FOR BRAINSTORMING
FURTHER DEVELOPMENT BUT IN MANY CASES A GOOD IDEA EMERGES "RAIN
STORMING SESSIONS SHOULD BE CARRIED OUT AS FAR AWAY AS POSSIBLE FROM
THE DAILY BUSINESS IN ORDER TO FREE THE MIND FOR NEW AND CREATIVE IDEAS
EVEN IF THEY SEEM UNREALISTIC AT lRST SIGHT
7HEN USING THIS METHOD THE FOLLOWING RULES SHOULD BE CON

SIDERED
Q NO MANNER OF CRITICISM POSITIVE OR NEGATIVE IS ALLOWED

Q NO COMMENTS ON IDEAS ARE ALLOWED EXCEPT TO CLARIFY WHAT
THEY MEAN
Q IT IS IMPORTANT THAT ALL PARTICIPANTS CAN EXPRESS THEMSELVES
FREELY n THE MORE OFF BEAT THE IDEA THE BETTER
Q IDEAS SHOULD BE DEVELOPED AS MUCH AS POSSIBLE
Q QUANTITY OF IDEAS IS DESIRED n THE GREATER THE NUMBER OF IDEAS
THE GREATER THE LIKELIHOOD OF USEFUL IDEAS EMERGING
Q IDEAS OF OTHERS CAN EVEN BE USED TO PRODUCE ANOTHER NEW
IDEA
Q NO ONE SHOULD DOMINATE OR INHIBIT THE DISCUSSION
4HIS METHOD IS VERY COMPLEX ! MODERATOR LEADS A GROUP OF

PEOPLE THROUGH AN OPEN IN DEPTH DISCUSSION &OR A NEW PRO
DUCT AREA THE MODERATOR FOCUSES THE DISCUSSION OF THE GROUP EITHER IN FOCUS GROUP
A DIRECTIVE OR A NON DIRECTIVE MANNER /N THE ONE HAND THERE IS THE DISCUSSION
POSSIBILITY OF CONDUCTING SUCH A FOCUS GROUP DISCUSSION WITH POTEN
TIAL PARTNERS WHILE ON THE OTHER IT IS ALSO POSSIBLE TO INVITE POTENTIAL
CUSTOMERS 7ORKING WITH POTENTIAL CUSTOMERS HOWEVER ASSUMES A
BASIC BUSINESS CONCEPT 4HE FOCUS GROUP DISCUSSION IS ALSO AN EXCEL
LENT INITIAL METHOD FOR SCREENING IDEAS AND CONCEPTS
5SING THIS METHOD IT IS POSSIBLE TO DEVELOP A NEW IDEA BY MEANS

OF A LIST OF RELATED ISSUES OR SUGGESTIONS "ASED ON A LIST WITH QUESTIONS
OR STATEMENTS IT IS POSSIBLE TO GUIDE THE DIRECTION OF DEVELOPING NEW CHECKLIST METHOD
IDEAS OR CONCENTRATE ON SPECIlC IDEA AREAS 4HE FORM AND LENGTH OF
THE CHECKLIST ARE VARIABLE 4HE FOLLOWING QUESTIONS ARE POSSIBLE KEY
WORDS FOR A CHECKLIST

Q PUT TO OTHER USES NEW WAYS TO USE OTHER USES IF MODIlED

Q ADAPT WHAT ELSE IS LIKE THIS WHAT OTHER IDEAS CAN BE DEVE
LOPED THROUGH THE ADAPTATION
Q MODIFY NEW TWIST CHANGE SMELL COLOUR FORM SHAPE OTHER
CHANGES
Q MAGNIFY WHAT TO ADD STRONGER EXTRA VALUE
Q MINIMISE WHAT SUBSTITUTE SMALLER SPLIT UP
Q SUBSTITUTE WHO ELSE INSTEAD OTHER INGREDIENT OTHER PROCESS
Q ETC
&REE WORD ASSOCIATION MEANS DEVELOPING A NEW IDEA THROUGH A

FREE WORD ASSO CHAIN OF WORD ASSOCIATION )T IS ONE OF THE SIMPLEST AND MOST EFFECTIVE
CIATION METHOD METHODS OF GENERATING NEW IDEAS )N THE lRST STEP A WORD OR PHRASE
RELATED TO THE PROBLEM IS WRITTEN DOWN 3UBSEQUENTLY FURTHER WORDS
ARE WRITTEN DOWN ALWAYS RELATED TO THE WORD OR PHRASE BEFORE 7ITH
EACH NEW WORD AN ATTEMPT IS MADE TO ADD SOMETHING NEW TO THE ON
GOING THOUGHT PROCESS THEREBY CREATING A CHAIN OF IDEAS AND THIS MAY
END WITH A NEW PRODUCT IDEA EMERGING
4HERE ARE MANY DIFFERENT WAYS TO lND AN IDEA ! BRIGHT IDEA CAN
ALSO EMERGE DOING @SIMPLE THINGS LIKE SHOPPING WALKING OR SLEEPING
$URING THE DEVELOPMENT PHASE A PEN AND A NOTEPAD ARE VERY IMPOR
TANT AND SHOULD ALWAYS BE TO HAND
4HROUGHOUT THE WHOLE PROCESS HOWEVER IT SHOULD NEVER BE FOR

GOTTEN THAT THE KEY TO THE SUCCESS OF A NEW PRODUCT OR A NEW STRATEGY
IS A SATISlED CUSTOMER 4HE CUSTOMER IS BUYING THE SATISFACTION OF A
NEED THE SOLUTION TO A PROBLEM FOR EXAMPLE FOOD AND DRINK WELL
BEING OR SELF ESTEEM $ETERMINING MARKET DEMAND IS BY FAR THE MOST
IMPORTANT CRITERION FOR A PROPOSED NEW PRODUCT IDEA
@'RANALPIN 3WITZERLAND
6ETERINARIANS VISION OF VITAL CEREALS FROM CULTIVATION IN THE MOUN
TAINS
! VETERINARIAN HAD A VISION OF REACTIVATING A REGIONAL TRADITION OF
GROWING CEREALS HIGH IN MOUNTAIN AREAS AS A MEAN OF DIVERSIFYING
ECONOMIC ACTIVITIES AND OF OBTAINING A HIGHER PRICE ON THE BASIS OF THE
@HIGHER VITALITY OF SUCH CEREALS 3OURCE &I", &RICK 3WITZERLAND

0RE START PHASE
)T CAN BE HELPFUL EVEN EARLY ON IN THE IDEA GENERATION PHASE TO

USE EXTERNAL SUPPORT IN THE FORM OF NEUTRAL MODERATORS OR ADVISORS
4HEY CAN HELP TO STRUCTURE IDEAS AND THE DISCUSSION PROCESS OR TO RAISE
RELEVANT QUESTIONS FROM A NEUTRAL POINT OF VIEW
!T THE END OF THIS SECTION THE /-) INITIATORS SHOULD CONSIDER THE
FOLLOWING QUESTIONS
Q 7HAT IS OUR VISION
Q (OW CAN WE TURN OUR VISION INTO A BRIGHT BUSINESS IDEA
,OOKING FOR POTENTIAL SUPPORT

!FTER DEVELOPING A BRIGHT BUSINESS IDEA THE NEXT STEP IS TO lND OUT
WHO CAN SUPPORT THIS IDEA 4HERE ARE DIFFERENT KINDS OF POSSIBLE SUP
PORTERS &IRST THERE IS THE SUPPORT FROM A PARTNER FOR EXAMPLE IN THE
FORM OF CO OPERATION (ERE THE QUESTION IS @(OW DOES ONE lND A
SUITABLE PARTNER 3OME OF THE MAIN CRITERIA FOR ANSWERING THIS QUES
TION ARE DISCUSSED IN THIS SECTION
&OR THE /-) INITIATORS IT IS VERY IMPORTANT TO DEVELOP A NET

WORK OF POTENTIAL SUPPORTERS FOR EXAMPLE FOR ADVICE AND COUNSELLING
ON BUSINESS ACTIVITIES FOR GOVERNMENT OR PRIVATE lNANCIAL SUPPORT
AND EVEN PSYCHOLOGICAL SUPPORT 4HIS NETWORK WILL NOT ONLY HELP
DURING THE PRE START AND START UP PHASE OF THE BUSINESS BUT IS ALSO
RELEVANT FOR THE FURTHER DEVELOPMENT OF THE /-)
0ARTNERSHIP CO OPERATION
.ORMALLY IN THE AGRICULTURAL SECTOR NO PRODUCER HOWEVER LARGE IS
LIKELY TO BE ABLE TO SUPPLY THE VOLUME REQUIRED BY THE PRINCIPAL MAR
KET ACTORS )T IS ALSO QUITE OBVIOUS THAT MANY VALUE ADDED ACTIVITIES
PRODUCT DEVELOPMENT BRANDING AND EFFECTIVE PROMOTION ARE DIFlCULT
FOR THE INDIVIDUAL PRODUCER TO ACHIEVE /NE WAY IN WHICH A PRODUCER
CAN IMPROVE THESE ACTIVITIES MORE EFFECTIVELY IS BY CO OPERATING WITH
OTHER PARTNERS #O OPERATION MEANS TWO OR MORE COMPANIES FORM
ING A NETWORK
4HERE ARE TWO DIFFERENT WAYS OF CLASSIFYING FORMS OF CO OPERA

TION

"ASIC FORMS OF COOPERATION
BUTCHER
VERTICAL PIG FARMER HORIZONTAL PIG FARMER
SUPPLIER OF
ANIMAL FEED
FARMER FARMER
CEREAL MEAT MEAT CEREAL
PARTIAL
FARMERS SELL THEIR
MEAT TOGETHER
TOTAL
FARMERS SELL THEIR
PRODUCTS TOGETHER
&IGURE "ASIC FORMS OF CO OPERATION
4HE lRST METHOD OF CLASSIlCATION DIFFERENTIATES BETWEEN

HORIZONTAL AND HORIZONTAL ANDOR VERTICAL CO OPERATION 4HE HORIZONTAL FORM OF CO
VERTICAL OPERATION CAN BE FOUND BETWEEN PRODUCERS WHO WORK AT THE SAME
CO OPERATION BUSINESS LEVEL FOR EXAMPLE TWO POTATO FARMERS 6ERTICAL CO OPERATION
IS WHEN AT LEAST TWO PARTNERS FROM DIFFERENT BUSINESS lELDS WORK TO
GETHER SUCH AS A PIG FARMER AND A BUTCHER
4HE SECOND WAY OF CLASSIFYING CO OPERATION IS BASED ON WHETHER

CO OPERATION IS TOTAL OR PARTIAL 4OTAL CO OPERATION MEANS CO OPERA

0RE START PHASE
TION RELATING TO ALL BUSINESS AREAS OF THE INDIVIDUAL COMPANIES 4HIS TOTAL OR PARTIAL
KIND OF CO OPERATION IS VERY EXCEPTIONAL IN THE AGRICULTURAL SECTOR CO OPERATION
0ARTIAL CO OPERATION IS WHEN CO OPERATION INVOLVES ONE OR MORE BUT
NOT ALL BUSINESS AREAS 4HE BASIC FORMS OF CO OPERATION ARE SHOWN IN
lGURE
@"IO"OURGOGNE 6IANDE &RANCE

3TRONG REGIONAL NETWORK AND SUPPORT STRUCTURE WITH PUBLIC FUNDS
"IO"OURGOGNE 6IANDE ""6 IS A LIMITED COMPANY WITH PRODUCERS
AS SHAREHOLDERS CREATED IN 4HE MANAGER IS A PRODUCER ""6 IS
LOCATED IN "URGUNDY NORTH EASTERN &RANCE !ROUND PRODUCERS
ARE MEMBERS OF THE STRUCTURE 4HIS IS A ORGANIC VENTURE AND
IS ENGAGED IN ORGANIC MEAT MARKETING ESPECIALLY BEEF CATTLE MAINLY
#HAROLAIS CULL COWS )N "IO"OURGOGNE 6IANDE SOLD ITS PRODUCTS
TO RETAIL CHAINS SIX ORGANIC BUTCHERS THREE OF THEM BASED IN
THE REGION ONE CONSUMERS CO OPERATIVE ONE WHOLESALER SPECIALIS
ING IN FROZEN MEAT AND ALSO VIA MAIL ORDER
"IO"OURGOGNE 6IANDE IS AN ACTIVE MEMBER OF THE "IO"OURGOGNE
ASSOCIATION A REGIONAL ORGANIC FARMING ASSOCIATION WITH ITS OWN
REGIONAL ORGANIC LABEL /NE OF THE AIMS OF THIS ASSOCIATION CRE
ATED IN THE EARLY S IS TO CONTRIBUTE TO REGIONAL DEVELOPMENT BY
PROMOTING REGIONAL PRODUCTS 4HANKS TO THE DEVELOPMENT OF A GOOD
REGIONAL NETWORK WITH ONE HIGHLY COMMITTED PERSON ""6 OBTAINED
REGIONAL lNANCIAL SUPPORT FOR SEVERAL YEARS FOR INVESTMENTS IN A MEAT
PROCESSING UNIT AS WELL AS FOR STAFF EG FOR A DELIVERY SERVICE FROM THE
#ONSEIL 2°GIONAL REGIONAL COUNCIL )T HAS BENElTED FROM THE CREA
TION OF 3%$!2" 3ERVICE D%CO $°VELOPPEMENT !GRICOLE ET 2URAL DE
"OURGOGNE IN 3%$!2" WAS SET UP TO EXERT AN INmUENCE ON THE
BEEF INDUSTRY BOTH DOWNSTREAM AND UPSTREAM ESPECIALLY THE ORGANIC
CEREALS AND MEAT SECTORS WITH A FOCUS ON RURAL DEVELOPMENT 4HANKS
TO PUBLIC FUNDING "IO"OURGOGNE 6IANDE WAS ABLE TO INVEST IN A MEAT
CUTTING UNIT AND SALES STRUCTURE IN PARTICULAR TO BETTER SERVE THE NEEDS
OF SPECIAL CUSTOMERS
!LTHOUGH THIS STRONG SUPPORT STRUCTURE WAS VERY HELPFUL IN THE PRE
START AND START UP PHASE IT COULD POSE A RISK IF THE PUBLIC FUNDING
COMES TO AN END AND THE /-) IS ILL PREPARED TO OPERATE WITHOUT PUB
LIC SUPPORT 3OURCE ).2! ,E -ANS &RANCE

4HE QUESTION NOW IS @(OW DOES ONE lND CO OPERATION PART
NERS &IRST IT IS IMPORTANT TO ASCERTAIN WHETHER VERTICAL OR HORIZONTAL
CO OPERATION WILL BE ENTERED INTO )N THE CASE OF VERTICAL CO OPERA
TION IT IS NECESSARY FOR THE FARMER TO MEET THE DEMANDS OF THE CO
OPERATION PARTNER &OR EXAMPLE IF A PIG FARMER IS CO OPERATING WITH A
BUTCHER THE BUTCHER PROBABLY EXPECTS THE SAME QUALITY OF MEAT DUR
ING THE WHOLE YEAR AND A QUANTITY THAT MEETS VARYING REQUIREMENTS AT
DIFFERENT TIMES OF YEAR FOR EXAMPLE ON SPECIAL HOLIDAYS THE DEMAND
FOR PORK IS HIGHER
4HIS MEANS THAT THE PIG FARMER MUST PRODUCE THE SAME QUALITY
WHILE THE QUANTITY WILL VARY ACCORDING TO THE DEMANDS OF THE BUTCHER
OVER THE COURSE OF THE YEAR "EFORE ENTERING INTO VERTICAL CO OPERA
TION THE FARMERS MUST KNOW EXACTLY WHETHER OR NOT THE DEMANDS OF
THE CO OPERATION PARTNERS CAN BE MET )T IS ALSO IMPORTANT TO KNOW
WHETHER THE BUTCHER WILL MEET THE EXPECTATIONS OF THE FARMER 4HESE
QUESTIONS MUST BE CHECKED BEFORE ENTERING INTO VERTICAL CO OPERA
TION )T IS SIMILAR IN THE CASE OF HORIZONTAL CO OPERATION 4HE DEMANDS
AND EXPECTATIONS OF THE CO OPERATION PARTNERS MUST BE CLEAR )N THE
FOLLOWING SECTION lVE KEY STEPS FOR ESTABLISHING CO OPERATION ARE
PRESENTED
3TEP n $ECISION TO ADOPT A FORM OF CO OPERATION

4HIS STEP DEPENDS ON THE BUSINESS IDEA "EFORE SEARCHING FOR CO
OPERATION PARTNERS THE FORM OF CO OPERATION SHOULD BE QUITE CLEAR
(OWEVER THROUGHOUT THE DEVELOPMENT OF CO OPERATION THE FORM OF
FORM OF WORKING TOGETHER CAN STILL CHANGE EG IF A NEW CO OPERATION PARTNER
CO OPERATION COMES UP WITH A NEW OR MODIlED BUSINESS IDEA
3TEP n .UMBER OF CO OPERATION PARTNERS DURING THE START UP

PHASE
NUMBER OF )T SHOULD BE CLEAR HOW MANY CO OPERATION PARTNERS ARE NECESSARY AT
CO OPERATION THE BEGINNING OF THE CO OPERATION /F COURSE THIS NUMBER CAN CHANGE
PARTNERS IF CO OPERATION DEVELOPS FURTHER
3TEP n 3EARCHING FOR COMPANIES TO BE CONSIDERED FOR CO OPERATION

$EPENDING ON THE FORM OF CO OPERATION IT IS NECESSARY TO lND COM
CHOICE OF PANIES THAT ARE SUITABLE IN TERMS OF THE OBJECTIVES OF THE BUSINESS AND
CO OPERATION THE BUSINESS IDEA !TTENTION SHOULD BE PAID TO THE FOLLOWING CRITERIA
PARTNERS DURING THE SEARCH

0RE START PHASE
Q OBJECTIVES n $OES THE PARTNER SHARE THE SAME PRINCIPAL

BUSINESS IDEA BUSINESS OBJECTIVES AND ALSO NON PROlT OBJEC
TIVES
Q PRODUCT n )S THE POTENTIAL CO OPERATION PARTNER PRODUCING
DEMANDING THE REQUIRED PRODUCT
Q QUALITY n )S THE POTENTIAL PARTNER PRODUCING THE REQUIRED
QUALITY ANDOR ABLE TO PROCESS PRODUCTS TO THE CURRENT QUA
LITY STANDARD
Q QUANTITY n )S THE POTENTIAL CO OPERATION PARTNER PRODUCING A
SUFlCIENT AMOUNT TO MAKE CO OPERATION WORTHWHILE
Q DISTRIBUTION n (OW FAR AWAY CAN THE POTENTIAL PARTNER BE SO
THAT DISTRIBUTION IS NOT A PROBLEM AND CO OPERATION IS STILL
WORTHWHILE 3HOULD THE LOGISTICS SYSTEM BE CARRIED OUT BY
THE CO OPERATION PARTNERS ALONE OR SHOULD EXTERNAL COMPA
NIES TAKE OVER THIS FUNCTION
Q REGIONALISM n #AN THE POTENTIAL CO OPERATION PARTNER STILL
COUNT ON REGIONALISM )F @REGIONALISM IS USED AS A CLAIM THE
@BOUNDARIES OF THE REGION MUST BE CLEAR
Q REPUTATION n $OES THE PARTNER HAVE A REPUTATION AS COMPE
TENT CO OPERATIVE TRUSTWORTHY AND RELIABLE
3TEP n !CTIVATING POTENTIAL CO OPERATION PARTNERS

!FTER IDENTIFYING POTENTIAL CO OPERATION PARTNERS IT IS NECES ACTIVATING
SARY TO GET INVOLVED WITH THEM $EPENDING ON THE NUMBER OF PO POTENTIAL
TENTIAL PARTNERS IT IS POSSIBLE TO INTRODUCE EACH PARTNER INDIVIDUALLY PARTNERS
OR TO INVITE THEM ALL TOGETHER AND PRESENT THE BUSINESS IDEA )T IS NOT
NECESSARY AT THIS POINT TO PRESENT AN ELABORATE BUSINESS CONCEPT 4HE
lRST MEETING WITH THE POTENTIAL PARTNERS SHOULD JUST GIVE THEM AN
IDEA OF THE SORT OF CO OPERATION BEING CONSIDERED SO THAT THE POTEN
TIAL PARTNER HAS THE POSSIBILITY OF ASSESSING WHETHER CO OPERATION IS
ATTRACTIVE 4HE POTENTIAL PARTNER ALSO HAS THE POSSIBILITY OF BRINGING
IN HISHER OWN VISION AND IDEAS REGARDING CO OPERATION
3TEP n #HECKING PERSONAL ASSUMPTIONS

)T IS VERY IMPORTANT THAT THE FOLLOWING CRITERIA ARE MET BY ALL CHECKING
CO OPERATION PARTNERS POTENTIAL
Q WILLINGNESS TO ACCEPT SOLE AUTHORITY AND SHARE AUTHORITY IN CO OPERATION
DECISION MAKING PARTNERS
Q TO SET ASIDE RIVALRIES

Q OPENNESS
Q TRUST IN PARTNERS
Q MAKING SURE INFORMATION IS FORWARDED
4HESE CRITERIA ARE OFTEN NOT FOLLOWED ESPECIALLY IN SMALL COM

PANIES 5NFORTUNATELY MANY FARMERS ARE STILL DEEPLY SUSPICIOUS OF
CO OPERATION AND ARGUE ON THE BASIS OF A FEW WELL PUBLICISED PAST
@)' "IO 7EIDE "EEFÙ 3WITZERLAND

6ERTICAL CO OPERATION BETWEEN PRODUCERS A LARGE SUPERMARKET
CHAIN AND AN ANIMAL TRADING COMPANY FOR MARKETING OF ORGANIC
BEEF
)' "IO 7EIDE "EEF )NTEREST GROUP FOR ORGANIC PASTURE BEEF IS AN AS
SOCIATION IN %ASTERN 3WITZERLAND INITIATED BY AN ORGANIC FARM ADVISOR
OF &I", 2ESEARCH )NSTITUTE OF /RGANIC !GRICULTURE )T WAS FOUNDED IN
WITH THE AIM OF SUPPORTING THE SALE OF ORGANIC MEAT FROM PAS
TURED CATTLE "IO 7EIDE "EEFÙ
4HE ASSOCIATION IS BASED ON CONTRACTS BETWEEN THE THREE PARTNERS OF
THE ORGANISATION THE MEAT PRODUCERS THE REGIONAL CO OPERATIVE OF THE
LARGEST RETAIL CHAIN IN 3WITZERLAND -IGROS /STSCHWEIZ AND THE ANIMAL
TRADING COMPANY ,INUS 3ILVESTRI !' /PERATIVE DECISIONS ARE MADE BY
THE MANAGEMENT BOARD STRATEGIC DECISIONS BY THE GENERAL ASSEMBLY
!CTIVITIES ARE THE ORGANISATION OF THE MEAT PRODUCERS CLOSE CO OPERA
TION WITH A PROFESSIONAL MEAT WHOLESALER AND THE SUPERMARKET CHAIN
-IGROS /STSCHWEIZ CO ORDINATION OF PRICE SETTING CO ORDINATION OF
SUPPLY AND DEMAND IN ORDER TO CREATE TRANSPARENCY IN THE MARKET
"IO 7EIDE "EEFÙ IS AN IMPORTANT INCOME ALTERNATIVE FOR MILK PRODU
CERS WHO HAVE HAD TO REDUCE THEIR WORKLOAD &URTHERMORE IT CON
TRIBUTES TO THE PRODUCERS QUALITY OF LIFE LOWER WORKLOAD TO ANIMAL
WELFARE AND TO AN EFlCIENT USE OF GRASSLANDS
$UE TO TRUST BASED CO OPERATION WITH THE RETAILER -IGROS /STSCHWEIZ
THE )' WAS ABLE TO INCREASE THE TURNOVER OF ORGANIC BEEF OF -IGROS
/STSCHWEIZ FROM MN %URO IN THE YEAR TO MN %URO IN THE
YEAR WITH SALES SHARE IN -IGROS /STSCHWEIZ (OWEVER IT
IS CRITICAL THAT THE )' HAS ONLY ONE CUSTOMER AND ITS SUCCESS DEPENDS
HIGHLY ON THE COMMITMENT OF A FEW PERSONS
3OURCE &I", &RICK 3WITZERLAND

0RE START PHASE
"EEF FROM THE BRAND "IO 7EIDE "EEFÙ HAS A MARKET SHARE OF NEARLY IN SUPERMAR
KETS OF @-IGROS /STSCHWEIZ 0HOTO " "APST
FAILURES THAT ALL CO OPERATION IS INEFFECTIVE 3OME OF THEM ONLY BE

COME INTERESTED IN CO OPERATION WHEN THEY ARE IN A BUSINESS CRISIS )N
SUCH CASES ANOTHER IMPORTANT PRECONDITION FOR THE SUCCESS OF CO OP
ERATION IS NOT PRESENT AS A COMPANY IS NOT INTERESTED IN A CO OPERA
TION PARTNER THAT IS FACING ECONOMIC DIFlCULTIES 4O SUMMARISE IT IS
IMPORTANT TO KNOW IF THE CHAIRPERSON OF THE CO OPERATION PARTNER IS
WILLING TO ADHERE TO THE CRITERIA SPECIlED ABOVE AND IF HISHER COM
PANY IS ECONOMICALLY SOUND
$EVELOPMENT OF A NETWORK
)T IS VERY IMPORTANT THAT CO OPERATION SHOULD BE SURROUNDED BY A
NETWORK ! NETWORK IS A GROUP OF ACTORS AND MULTI FORM PARTNERSHIPS
THAT CAN BE ESTABLISHED EITHER ALONG A MARKET CHAIN OR IN THE FORM OF A
REGIONAL NETWORK WITH MORE EXTERNAL ACTORS SEE DETAILED DESCRIPTION
IN CHAPTER
3OME POTENTIAL SUPPORTERS THAT CAN BE PART OF SUCH A NETWORK

ARE MENTIONED IN THE NEXT SECTION

4HE /-) INITIATORS ALSO NEEDS ADVICE AND CONSULTANCY

THROUGHOUT THE PERIOD WHEN THE NEW BUSINESS IS BEING ESTABLISHED
4HIS ADVICE CAN BE OBTAINED FROM A MENTOR OR FROM BUSINESS AS
SOCIATIONS ETC IN VARIOUS lELDS n SUCH AS FUNDAMENTAL BUSINESS
BUSINESS SUPPORT ACTIVITIES lNANCE MARKETING ACCOUNTING LAW OR MANAGEMENT )T
WOULD BE BENElCIAL TO HAVE ONE PERSON WHO HAS KNOWLEDGE OF SOME
OF THESE AREAS AS A CO OPERATION PARTNER OR INVOLVED IN OTHER WAYS IN
THE DEVELOPMENT OF THE NEW BUSINESS PRODUCT /N THE ONE HAND
IT IS QUITE DIFlCULT TO lND SUCH A PERSON WHILE ON THE OTHER HAND
PROFESSIONAL SUPPORT CAN BE VERY EXPENSIVE #OLLEGES OR UNIVERSITIES
FOR EXAMPLE PROVIDE A MUCH CHEAPER OPTION FOR OBTAINING SUPPORT
REGARDING QUESTIONS OF MARKETING OR BUSINESS ACTIVITIES .ORMALLY
UNIVERSITY OR COLLEGE LECTURERS ARE ALWAYS INTERESTED IN PRACTICE ORI
ENTED PROJECTS FOR THEIR STUDENTS /F COURSE THE SERVICES OF A GOOD
UNIVERSITY OR COLLEGE ARE NOT FREE OF CHARGE BUT MAY BE CHEAPER THAN
A CONSULTANCY lRM
'OVERNMENT SUPPORT IS DIFFERENT IN EACH COUNTRY SEE CHAPTER

GOVERNMENTAL )T IS MENTIONED HERE ONLY FOR THE SAKE OF COMPLETENESS 4HE
SUPPORT EASIEST WAY TO lND OUT WHAT GOVERNMENT SUPPORT MIGHT BE AVAILABLE
FOR A NEW BUSINESS IDEA IS TO APPROACH THE RELEVANT AGRICULTURAL AD
MINISTRATION OR A REGIONAL CHAMBER OF COMMERCE AND INDUSTRY 4HE
EMPLOYEES IN THESE INSTITUTIONS WILL BE AWARE OF ANY POSSIBILITIES FOR
OBTAINING GOVERNMENT SUPPORT EG IN THE FORM OF FUNDING OR ADULT
EDUCATION COURSES
(AVING A CONTACT PERSON IN THE REGIONAL MEDIA AGENCIES IS AL

PRESS MEDIA WAYS BENElCIAL 4HESE PERSONS ARE NORMALLY OPINION LEADERS AND THEY
SUPPORT CAN INmUENCE PUBLIC OPINION IN A SIGNIlCANT WAY )T CAN BE VERY HELP
FUL TO INFORM THE PRESS ABOUT THE DEVELOPMENT OF THE NEW BUSINESS
0OSITIVE PUBLIC OPINION HAS A POSITIVE EFFECT IN TERMS OF CO OPERATION
AND RAISES THE /-)S PUBLIC PROlLE 4HE TYPE AND FREQUENCY OF MEDIA
COVERAGE AS WELL AS THE SPATIAL AREA IN WHICH MEDIA AGENCIES SHOULD
REGULARLY BE CONTACTED DEPEND ON THE VOLUME TYPE AND SPATIAL SCOPE
OF THE /-)S SALES ACTIVITIES
SUPPORT THROUGH !SSOCIATIONS AND ORGANISATIONS LIKE ENVIRONMENTAL ORGANISA

ASSOCIATIONS TIONS OR REGIONAL DEVELOPMENT ASSOCIATIONS ARE ALSO OPINION LEADERS
ORGANISATIONS !CTIVE PARTICIPATION BY THE /-) INITIATORS IN SUCH ORGANISATIONS

0RE START PHASE
@/RGANIC -ILK 3UPPLIERS #O OPERATIVE /-3#O 5NITED +INGDOM

/-3#O STARTED WITH THE ADVICESUPPORTINVOLVEMENT OF 9EO 6ALLEY A
YOGHURT PROCESSOR WHICH AS A BUYER PROVIDED EARLY ACCESS TO THE
MARKET )N ADDITION THE %LM &ARM 2ESEARCH #ENTRE ORGANIC ADVICE
AND RESEARCH ORGANISATION WAS INVOLVED IN HELPING TO SET UP THE CO
OPERATIVE
3OURCE 3CHOOL OF -ANAGEMENT AND "USINESS 5NIVERSITY OF 7ALES
!BERYSTWYTH 5NITED +INGDOM
CAN HAVE A POSITIVE IMPACT ON THE NEW BUSINESS 4HE /-) INITIATORS
SHOULD ALWAYS SHOW THAT THE NEW BUSINESS WILL BRING BENElTS TO THE
REGION IN WHICH IT OPERATES
3UPPORTERS FROM THE MORE IMMEDIATE BUSINESS ENVIRONMENT

INCLUDE FOR EXAMPLE LENDERS SUPPLIERS AND BUYERS !LL STAKEHOLDERS
OF POTENTIAL INTEREST TO THE NEW BUSINESS SHOULD BE INVOLVED IN SOME
WAY
&INALLY THERE IS ONE GROUP OF SUPPORTERS THAT HAS NOT SO FAR

BEEN MENTIONED 3TARTING A NEW BUSINESS REQUIRES A GREAT DEAL OF
TIME 3PARE TIME FAMILY TIME AND TIME WITH FRIENDS BECOME SHORTER PRIVATE SUPPORT
&OR THIS REASON IT IS IMPORTANT FOR EACH ENTREPRENEUR TO ESTABLISH A
@MORAL SUPPORT NETWORK 3POUSE FRIENDS AND FAMILY n THE @HURRAH
SQUAD n PLAY A CRITICAL ROLE DURING THE MANY DIFlCULT TIMES THAT OC
CUR THROUGHOUT THE ENTREPRENEURIAL PROCESS 4HE @HURRAH SQUAD MAY
PROVIDE ADVICE THAT IS OFTEN MORE HONEST THAN ADVICE RECEIVED FROM
@6ALPLANTES #O OPERATIVE 3WITZERLAND

4HIS CO OPERATIVE FOUNDED IN IS ONE OF THE LEADING ORGANIC
HERB GROWING CO OPERATIVES IN THE 6ALAIS CANTON OF 3WITZERLAND
n MAINLY SMALL n FARMERS ARE PRODUCING FOR 6ALPLANTES 4HE HERBS ARE
DRIED IN A SPECIAL UNIT AND ARE USED AS RAW MATERIALS FOR TEA CONFEC
TIONERY HEALTH AND COSMETIC PRODUCTS 4HEY DID GET lNANCIAL SUPPORT
IN THE STARTPHASE FROM A HERB PROCESSING lRM 2ICOLA !'

!T THE END OF THIS SECTION THE /-) INITIATORS SHOULD CONSIDER THE
FOLLOWING QUESTIONS
Q $O WE WANT TO CO OPERATE WITH SOMEBODY OR DO WE WANT TO
LEAD AND RUN THE BUSINESS BY OURSELVES
Q 7HAT FORM OF CO OPERATION IS THE RIGHT FORM FOR OUR BUSINESS
Q 7HICH CO OPERATION PARTNER IS SUITED TO OUR BUSINESS BUSINESS
IDEA
Q 7HO CAN GIVE US BUSINESS SUPPORT
Q 7HAT KIND OF GOVERNMENT SUPPORT IS AVAILABLE
Q 7HO IS A CONTACT PERSON AT REGIONAL MEDIA AGENCIES
Q 7HICH ASSOCIATIONS OR ORGANISATIONS MIGHT BE BENElCIAL FOR OUR
BUSINESS BUSINESS IDEA
Q (OW CAN WE PERSUADE SUPPORTERS FROM THE IMMEDIATE BUSI
NESS ENVIRONMENT EG LENDERS TO BACK THE BUSINESS BUSI
NESS IDEA
Q 7ILL WE GET FULL SUPPORT FROM OUR FAMILY AND FRIENDS
OTHER SOURCES AND THEY ALSO PROVIDE ENCOURAGEMENT UNDERSTANDING

AND EVEN PRACTICAL HELP 4OTAL FAMILY SUPPORT IS A MAJOR CRITERION FOR
THE SUCCESS OF A NEW BUSINESS
&ROM VISION BUSINESS IDEA TO CONCRETE OBJECTIVES

! CLEAR STATEMENT OF OBJECTIVES IS ESSENTIAL EVEN IN THE SMALLEST BUSI
NESS ! STATEMENT OF OBJECTIVES IS ALSO NORMAL PRACTICE IN CO OPERA
TION AND SHOULD BE IN /-)S TOO !CTIVITIES SHOULD BE ALIGNED TO BUSI
NESS OBJECTIVES 3O THE QUESTION IS @7HERE DO WE WANT TO GO WHICH
MEANS THAT THE ECONOMIC ENVIRONMENTAL AND SOCIAL OBJECTIVITIES
SHOULD BE SPECIlED
$ETERMINING BUSINESS OBJECTIVES IS AN EXTREMELY COMPLEX PROC

ESS ESPECIALLY IF SEVERAL PEOPLE WORK TOGETHER /BJECTIVES ARE REFER
ENCE POINTS FOR CORPORATE PERFORMANCE AND AS SUCH THEY NEED TO BE
CLEARLY IDENTIlABLE 4HIS MEANS AN OBJECTIVE SHOULD BE MEASURABLE
ACHIEVABLE REALISTIC TIME BASED AND COMMUNICABLE 4HE MAIN BUSI
NESS OBJECTIVES OF AN /-) CAN BE DIVIDED INTO THE FOLLOWING THREE
CATEGORIES SEE (!).%3

%CONOMIC OBJECTIVES
-ARKET LEADERSHIP MEASURED BY COMPETITIVE POSITION
DEGREE OF INNOVATION
TECHNOLOGICAL ADVANCE
-ARKET SPREAD MEASURED BY NUMBER OF PRODUCT MARKETS
NUMBER OF CUSTOMER SEGMENTS
NUMBER OF COUNTRIES
#USTOMER SERVICE MEASURED BY PRODUCT UTILITY
PRODUCT QUALITY
PRODUCT RELIABILITY
PRODUCT AVAILABILITY
'ROWTH MEASURED BY SALES REVENUE
VOLUME OUTPUT
MARKET SHARE
PROlT MARGIN
0ROlTABILITY MEASURED BY RETURN ON CAPITAL EMPLOYED
RETURN ON ASSETS
PROlT MARGIN ON SALES REVENUE
#USTOMERS SATISFACTION MEASURED BY REPEAT ORDERS
LOGISTICS BENCHMARKING
GOODS RETURNED
COMPLAINTS
LOST CUSTOMERS
CUSTOMER SURVEYS
%FlCIENCY MEASURED BY SALES ON TOTAL ASSETS
STOCK TURNOVER
CREDIT PERIOD
LIQUIDITY
DEPARTMENT COSTS ON SALE
0ERSONNEL MEASURED BY EMPLOYEE RELATIONS AND MORALE
PERSONAL DEVELOPMENT
AVERAGE EMPLOYEE REMUNERATION
SALES REVENUE PER EMPLOYEE
%COLOGICAL OBJECTIVES
%NVIRONMENTAL PROTECTION MEASURED BY ORGANIC AGRICULTURE AREASHARE
SOIL FERTILITY INDICATORS
BIODIVERSITY ANIMALS AND PLANTS
HEALTHY AND BALANCED PLANT EXISTENCE
ANIMAL WELFARE
NO USE OF GENETICALLY MODIlED ORGANISMS
RESOURCE SAVING WORKING METHODS
3OCIAL OBJECTIVES
3OCIAL RESPONSIBILITY MEASURED BY CORPORATE IMAGE
PRICEPROlT RELATIONSHIP
HUMAN RESOURCE UTILISATION
PUBLIC ACTIVITIES
COMMUNITY WELFARE
NUMBER OF NEW JOBS
CONTRIBUTION TO THE DEVELOPMENT OF THE REGION
/BJECTIVES CAN BE DElNED IN A MORE OR LESS DEMOCRATIC OR AUTO

CRATIC WAY "OTH APPROACHES OFFER ADVANTAGES AND DISADVANTAGES 4HE
MORE PERSONS ARE INCLUDED WITHIN THE PROCESS OF DElNING OBJECTIVES
THE MORE COMPLICATED AND SLOWER THE PROCESS WILL BE !DDITIONALLY
OBJECTIVES ELABORATED ACCORDING TO A VERY DEMOCRATIC PROCESS ARE
MORE OR LESS A COMPROMISE BETWEEN INDIVIDUAL OBJECTIVES ATTITUDES
AND WISHES 4HEREFORE THEY PARTLY LACK THE CLARITY AND DIRECTNESS THAT
ARE NECESSARY FOR THE /-) TO TAKE OFF SUCCESSFULLY IN COMMERCIAL
TERMS /N THE OTHER HAND IF THE OBJECTIVES ARE SET IN A MORE DEMO
CRATIC WAY THE OUTCOME WILL PROBABLY GAIN MORE SUPPORT FROM THE
BROAD MAJORITY OF THE /-) MEMBERS AND THEY WILL IDENTIFY MORE
CLOSELY WITH @THEIR OBJECTIVES
)N ORDER TO SUBSUME INDIVIDUAL OBJECTIVES INTO A SYSTEM IT IS

NECESSARY TO ANALYSE THE RELATIONSHIP BETWEEN THE OBJECTIVES 4HERE
CLEAR HIERARCHY ARE TWO MAIN TYPES OF INTERACTION BETWEEN OBJECTIVES n COMPLEMEN
OF DIFFERENT TARITY AND COMPETITION #OMPLEMENTARITY IS PRESENT IF ACHIEVING ONE
OBJECTIVES OBJECTIVE ENHANCES THE LIKELIHOOD OF ACHIEVING ANOTHER OBJECTIVE FOR
EXAMPLE PROlT AND n TO A LIMITED EXTENT n TURNOVER )F ACHIEVING
ONE OBJECTIVE HAS THE CONSEQUENCE THAT ANOTHER OBJECTIVE CANNOT
BE ACHIEVED THEN COMPETITION BETWEEN OBJECTIVES IS PRESENT AS FOR
EXAMPLE BETWEEN THE PURSUIT OF SHORT TERM PROlT AND THE PURSUIT OF
ANIMAL WELFARE
%SPECIALLY IN CO OPERATIVE VENTURES WHERE SEVERAL MANAGERS

WORK TOGETHER IT MAY BE QUITE DIFlCULT TO ARRANGE OBJECTIVES INTO A
HIERARCHY IN OTHER WORDS ESTABLISH WHICH OBJECTIVES ARE MORE IMPOR
TANT THAN OTHERS &OR THIS REASON IT IS IMPORTANT THAT ALL CO OPERATION
PARTNERS DElNE THEIR OBJECTIVES CLEARLY AND PRECISELY !LL CO OPERATION
PARTNERS SHOULD COME TOGETHER FOR A DISCUSSION ON OBJECTIVES $URING
THIS DISCUSSION THE RELATIONSHIP BETWEEN THE DIFFERENT OBJECTIVES MUST
BE ANALYSED #OMPLEMENTARITY ANDOR COMPETITION BETWEEN OBJEC
TIVES SHOULD BE THE FOCUS OF THIS DISCUSSION #OMPETING OR CONmICTING
OBJECTIVES SHOULD BE ELIMINATED FROM THE OUTSET AMONG CO OPERATION
PARTNERS IN ORDER TO AVOID LATER CONmICTS AND DISAPPOINTMENTS AMONG
PARTNERS CONCERNING THEIR EXPECTATIONS !T THE END OF THE DISCUSSION
A CLEAR HIERARCHY OF THE DIFFERENT OBJECTIVES OF ALL CO OPERATION PART
NERS SHOULD BE THE OUTCOME

0RE START PHASE
@0RIGNITZER 7EIDERIND 'ERMANY

&ROM VISIONBUSINESS IDEA TO PRECISE OBJECTIVES
4HE /-) 0RIGNITZER 7EIDERIND WAS FOUNDED IN IN NORTH EASTERN
'ERMANY BY ORGANIC FARMERS WITH THE INTENTION OF SELLING BEEF AND
VEAL TOGETHER TO OBTAIN A BETTER PRICE 4HE INITIATIVE IS AN ECONOMIC
ASSOCIATION WHICH WAS LINKED FROM THE BEGINNING TO A REGIONAL AS
SOCIATION FOR LANDSCAPE CONSERVATION AND A REGIONAL ORGANIC FARMERS
ORGANISATION "IOPARK "ECAUSE OF THE LOW PURCHASING POWER IN THE
REGION THE /-) IS SELLING MEAT THROUGHOUT THE WHOLE OF 'ERMANY
MAINLY THROUGH LARGE RETAILERS AND PRODUCERS OF BABY FOOD /NLY A
SMALL SHARE IS SOLD THROUGH FARM STORES AND ORGANIC FOOD SHOPS
)N THE PRE START PHASE THE /-) DElNED THE FOLLOWING OBJECTIVES
ECONOMIC OBJECTIVES OBTAINING A BETTER PRICE FOR THEIR PRODUCTS
ADDED VALUE IN THE REGION
ECONOMIC STABILITY OF THE /-)
PROlT MAKING
SOCIAL OBJECTIVES MAINTAINING JOBS
CO OPERATION IN THE NETWORK
ECOLOGICAL OBJECTIVES KEEPING POOR GRASSLANDS IN PRODUCTION
LANDSCAPE CONSERVATION
ANIMAL WELFARE
!LL OBJECTIVES WERE ACHIEVED THANKS TO A STRONG NETWORK

3OURCE 5NIVERSITY OF +ASSEL 'ERMANY
!T THE END OF THIS CHAPTER THE /-) INITIATORS SHOULD CONSIDER THE
FOLLOWING QUESTIONS
Q 7HERE DO WE WANT TO GO WITH THE /-)
Q 7HAT ARE THE MAIN ECONOMIC ENVIRONMENTAL AND SOCIAL OBJEC
TIVES
Q $O WE HAVE A CLEAR SYSTEM OF OBJECTIVES FREE OF COMPETING AND
CONmICTING OBJECTIVES
Q !RE THE OBJECTIVES DElNED CLEARLY

&INALLY IT IS ALSO IMPORTANT TO KNOW THAT THE NUMBER OF PRINCI

LIMITED NUMBER PAL OBJECTIVES SHOULD BE LIMITED TO BETWEEN SIX AND EIGHT BECAUSE TOO
OF OBJECTIVES MANY OBJECTIVES MAKES CONTROL AND MONITORING DIFlCULT /BVIOUSLY
THESE OBJECTIVES SHOULD REPRESENT KEY AREAS FOR ENSURING BUSINESS SUC
CESS
&IRST ROUGH MARKET ANALYSIS AND ASSESSMENT

!FTER DEVELOPING AN IDEA AND A NETWORK IT IS IMPORTANT TO ANALYSE THE
MARKET AND THE MARKET ENVIRONMENT 3UCH ANALYSIS SHOULD INCLUDE
FUNDING POSSIBILITIES AND AN ANALYSIS OF KEY ACTORS AND STAKEHOLDERS
4HE BUSINESS ENVIRONMENT OF AN /-) CAN BE DIVIDED INTO THE

ANALYSIS OF MACRO AND MICRO ENVIRONMENT 7HAT THIS DIFFERENTIATION LOOKS LIKE
MICRO AND IS SHOWN IN lGURE 4HE TERM MACRO ENVIRONMENT DElNES FACTORS
MACRO THAT ARE COMMON TO ALL BUSINESSES REGARDLESS OF SECTOR 4HESE FACTORS
ENVIRONMENT NORMALLY INCLUDE NATIONAL AND INTERNATIONAL POLITICS THE ECONOMIC
SITUATION THE SOCIAL OR CULTURAL SITUATION SCIENTIlC AND TECHNOLOGICAL
ISSUES THE LEGAL FRAMEWORK AND THE NATURAL ENVIRONMENT 2ELEVANT
DEVELOPMENTS IN THE MACRO ENVIRONMENT CAN BE VERY IMPORTANT FOR
AN /-) )MPENDING LEGAL CHANGES FOR EXAMPLE IN THE %5 2EGULATION
ON ORGANIC AGRICULTURE SHOULD DElNITELY BE GIVEN ATTENTION DURING
THE PLANNING OF AN /-) )F THE /-) IS FAR SIGHTED IN ITS APPROACH
IN THIS REGARD IT IS POSSIBLE TO GAIN A COMPETITIVE EDGE %VALUATING
EXTERNAL SOURCES FOR EXAMPLE STUDIES BY RESEARCH INSTITUTES CAN HELP
TO ANALYSE THE MACRO ENVIRONMENT #OLLEGES AND UNIVERSITIES ARE ALSO
SUITABLE PARTNERS FOR SUCH AN EVALUATION
)T IS DIFlCULT TO ASSIGN THE IMAGE OR THE CHARACTERISTICS OF A RE

ANALYSIS OF GION TO EITHER THE MACRO ENVIRONMENT OR TO THE MICRO ENVIRONMENT
LOCAL REGION &OR THIS REASON THE REGION IS ASSIGNED TO A SEPARATE CATEGORY BETWEEN
THE MACRO AND MICRO ENVIRONMENT 4HE IMAGE OR CHARACTERISTICS
OF A REGION IS VERY IMPORTANT FOR THE /-) AND SHOULD BE ANALYSED
CLOSELY !T LEAST IN TERMS OF PRODUCT MARKETING DETAILED KNOWLEDGE
REGARDING THE IMAGE OF THE REGION WILL HAVE A POSITIVE EFFECT )F THE
REGION IS WELL KNOWN WITH A POSITIVE NATURAL IMAGE EVEN OUTSIDE THE
REGION THE /-) MAY BE VERY SUCCESSFUL IN ADOPTING A SUPRA REGIONAL
MARKET APPROACH )F THE CONTRARY IS THE CASE IE POOR IMAGE FOR
EXAMPLE DUE TO A HEAVY INDUSTRIAL PRESENCE IN THE REGION THEN A
FOCUSSED INTERNAL REGIONAL APPROACH FOR MARKETING CONSUMER GOODS

0RE START PHASE
4HE MARKET ENVIRONMENT
-!#2/ %.6)2/.-%.4
SCIENTIFIC
TECHNOLOGICAL
ECONOMIC SOCIALCULTURAL
-)#2/ %.6)2/.-%.4
CUSTOMERS
"53).%33 REGIONAL
CHARACTERISTICS
RESOURCES PERFORMANCE
COMPETITORS SUPPLIERS
LEGAL NATURAL
POLITICAL
&IGURE 4HE MARKET ENVIRONMENT 3OURCE ADAPTED FROM (!).%3 P
MAY BE REQUIRED 4HE MARKETING MIGHT BE LIMITED TO RAW MATERIALS

FOR INDUSTRIAL PROCESSING )N THE LATTER CASE ANOTHER APPROACH THAT
MIGHT BE SUCCESSFUL COULD BE TO CONCENTRATE ON THE HANDLING OF LARGE
SUPPLY VOLUMES
4HE MICRO ENVIRONMENT IS SHAPED BY FACTORS THAT ARE UNIQUE
TO EVERY BUSINESS )N THE CASE OF AN /-) IT WILL CONSIST MAINLY OF THE
CUSTOMERS COMPETITORS AND SUPPLIERS OF THE /-)

! CAREFUL ANALYSIS OF THE MICRO AND MACRO ENVIRONMENT IS AN ESSENTIAL PRECONDITION TO

START /-) ACTIVITIES 0HOTO 2 3CHMUTZ
4HE END CUSTOMERS CONSUMERS ARE NOT ONLY BUYING THE @PROD
UCT THEY ARE ALSO BUYING THE VALUE BEHIND THE PRODUCT
&OR THIS REASON INFORMATION SHOULD BE GATHERED ABOUT THE
NEEDS OF THE CONSUMERS &OR THE DEVELOPMENT OF A BUSINESS THE
ANALYSIS OF THE LONG TERM BEHAVIOUR OF THE CONSUMERS IS ALSO IMPORTANT %SPECIALLY
END CUSTOMERS IN THE FOOD SECTOR MANY STUDIES ON THE BEHAVIOUR OF THE CONSUMERS
ARE AVAILABLE /NCE AGAIN UNIVERSITIES AND COLLEGES CAN BE VERY HELPFUL
IN THIS CONTEXT
!NALYSING COMPETITORS IS ONE IMPORTANT ASPECT OF AN INITIAL

ANALYSIS OF ROUGH MARKET ANALYSIS !T THE OUTSET IT IS NECESSARY TO IDENTIFY COM
THE MAIN PETITORS &OR THIS REASON A CLEARER FOCUS ON THE POTENTIAL MARKET IS
COMPETITORS NECESSARY 4HE FOLLOWING CRITERIA HELP TO DElNE THE POTENTIAL MARKET

0RE START PHASE
&ACTUAL
Q 4HE SPECIAL PRODUCT AND ALL PRODUCTS THAT HAVE A SIMILAR USE
FOR THE CUSTOMER MUST BE CONSIDERED FOR /-)S THIS MEANS
TAKING INTO ACCOUNT AS COMPETITORS NOT ONLY OTHER ORGANIC
PRODUCERS WITH SIMILAR PRODUCT PORTFOLIOS BUT ALSO CON
VENTIONAL MARKETING INITIATIVES WITH SIMILAR PRODUCTS AND
CONSIDERABLE MARKETING BUDGETS
#USTOMER SPECIlC
Q )T IS NOT ENOUGH TO MAKE GENERAL DISTINCTIONS BETWEEN CUS
TOMERS EG INDIVIDUAL CONSUMERS OR CANTEENS BUT RATHER
TO SUBDIVIDE CUSTOMERS FURTHER FOR EXAMPLE REGULAR BUYERS
AND OCCASIONAL BUYERS OF ORGANIC FOOD OR CANTEENS WITH A
lXED PRICE FOR MEALS AND THOSE WITH MEAL PRICING ACCORDING
TO THE VALUE OF THE FOOD PRODUCTS USED
3PATIAL
Q 4HE EXISTING OR POTENTIAL SALES REGION OF THE /-) SHOULD BE
A CRITERION IN THIS CONTEXT
4EMPORAL
Q 4HE WHOLE PERIOD OF AVAILABILITY AND THE REAL TIME OF STORAGE
MUST BE TAKEN INTO CONSIDERATION
0RESS REPORTS STATEMENTS FROM CONSUMERS ABOUT COMPETITORS

PRICE LISTS AND ADVERTISEMENTS FROM THE COMPETITOR CAN ALL BE VERY
HELPFUL &OR THIS REASON A SPECIAL lLE SHOULD BE COMPILED FOR EACH
COMPETITOR WITH ALL THE INFORMATION ABOUT THIS COMPETITOR 7ITH THE
HELP OF THIS INFORMATION IT IS POSSIBLE TO IDENTIFY WHERE STRENGTHS OR
WEAKNESSES OF THE COMPETITOR LIE AND HOW THESE STRENGTHS AND WEAK
NESSES CAN BE TURNED TO THE ADVANTAGE OF ONES OWN BUSINESS )T MAY
BE POSSIBLE TO TURN A COMPETITORS WEAKNESS INTO A STRENGTH FOR ONES
OWN BUSINESS
3UPPLIERS ARE NOT NORMALLY DIRECTLY INVOLVED IN THE SUCCESS OF ANALYSIS OF

THE /-) .EVERTHELESS A GOOD SUPPLY CHAIN IS AN IMPORTANT COM THE POTENTIAL
PONENT OF THE MICRO ENVIRONMENT (OWEVER IT IS NECESSARY FOR EX SUPPLIERS
AMPLE TO CHECK THE QUALITY OF RAW MATERIALS BECAUSE THE QUALITY OF
THE RAW MATERIAL ALSO AFFECTS THE QUALITY OF THE END PRODUCT ! GOOD

RELATIONSHIP BETWEEN THE SUPPLIER AND THE /-) IS ALSO IMPORTANT

%SPECIALLY IF PROBLEMS ARISE A mEXIBLE AND CO OPERATIVE SUPPLIER WILL
BE VERY BENElCIAL
2ESOURCES INCLUDE lNANCIAL AND HUMAN RESOURCES &INANCING IS

ANALYSIS OF A VERY IMPORTANT CRITERION !VAILABLE OPTIONS FOR lNANCING SHOULD BE
lNANCIAL ANALYSED $EPENDING ON THE BUSINESS IDEA AND THE TYPE OF BUSINESS IT
RESOURCES IS NECESSARY TO ESTABLISH HOW MUCH CAPITAL RESOURCES AND HOW MUCH
BORROWED CAPITAL MUST BE MOBILISED 4HE NEXT QUESTION IS WHERE TO
OBTAIN THE BORROWED CAPITAL !T THIS POINT THE POSSIBILITIES SHOULD BE
ASSESSED "ANK LOANS SUBSIDIES OR CREDITS FROM THE GOVERNMENT WITH
A REDUCED INTEREST RATE MONEY FROM PRIVATE INVESTORS ETC ARE JUST
SOME OF THE POSSIBILITIES (OWEVER IT IS ADVISABLE TO BE CAUTIOUS WITH
GOVERNMENT AID !N /-) THAT CANNOT lNANCE ITSELF FROM THE VERY
OUTSET WILL PROBABLY RUN INTO lNANCIAL PROBLEMS AFTER THE GOVERN
MENT AID COMES TO AN END &OR THIS REASON IT IS MUCH BETTER TO USE
GOVERNMENT AID AS A SUPPLEMENTARY RESOURCE TO DEAL WITH POTENTIAL
BUSINESS RISKS AND NOT AS PART OF THE START UP CAPITAL
!NALYSIS OF HUMAN RESOURCES IS ALSO ESSENTIAL %STABLISHING

ANALYSIS OF AN /-) INVOLVES A GREAT DEAL OF WORK )T IS THEREFORE IMPORTANT TO
HUMAN CONSIDER NOT ONLY THE QUANTITY BUT ALSO THE QUALITY OF THE HUMAN
RESOURCES RESOURCES )T SHOULD BE CLEAR THAT THE /-) INITIATORS OR PROMOTER
NEED TO POSSESS SPECIAL ABILITIES APPROPRIATE TO THE /-)S BUSINESS
AND OBJECTIVES "ASIC KNOWLEDGE OF BUSINESS MANAGEMENT MARKET
ING OF LEADING GROUPS AND SO ON ARE KEY CONDITIONS FOR THE SUCCESS
OF THE /-) )N ADDITION PERSONAL SKILLS FOR EXAMPLE WILLINGNESS TO
GIVE UP ANDOR SHARE SOLE AUTHORITY OR TO SET ASIDE RIVALRIES MUST BE
PRESENT
0ERFORMANCE PROVIDES INFORMATION ON THE CONTRIBUTION OF THE

/-) IN THE MICRO ENVIRONMENT 4O IMPROVE THE PERFORMANCE OF THE
NEW /-) A ROUGH 37/4 ANALYSIS CAN BE VERY HELPFUL
! 37/4 ANALYSIS IS A MEANS FOR EVALUATING THE OVERALL STRENGTHS

ROUGH 37/4 WEAKNESSES OPPORTUNITIES AND THREATS OF AN /-) 3TRENGTHS AND
ANALYSIS WEAKNESSES ARE ABOUT WHERE THE BUSINESS IS NOW COMPARED WITH ITS
COMPETITORS OPPORTUNITIES AND THREATS ARE ABOUT WHERE THE BUSINESS
IS GOING 4HIS MEANS OPPORTUNITIES ARE ATTRACTIVE AREAS FOR ACTION

0RE START PHASE
WHERE THE BUSINESS IS LIKELY TO HAVE SOME ADVANTAGES OR MAKE A SPE

CIAL CONTRIBUTION 4HREATS ARE CRITICAL TRENDS OR SPECIlC DISTURBANCES
IN THE ENVIRONMENT THAT COULD LEAD TO STAGNATION DECLINE OR DEMISE
OF THE BUSINESS OR A PART OF IT 4HE 37/4 ANALYSIS ALLOWS THE /-) TO
BETTER IDENTIFY MARKET GAPS AND SHOULD BE CONSIDERED WHEN MARKE
TING EFFORTS MUST DElNE A SPECIlC AND UNIQUE MARKET POSITIONING FOR
THE /-) AND ITS PRODUCTS #ARRYING OUT A 37/4 ANALYSIS CAN ITSELF
BE QUITE DIFlCULT $URING THE PROCESS lNDING THE WEAKNESSES MAY BE
EASY BUT UNCOVERING THE STRENGTHS IS OFTEN CHALLENGING ONCE THE PROC
ESS HAS STARTED 4HE METHODOLOGY FOR CARRYING OUT A 37/4 ANALYSIS
IS SHOWN IN &IGURE
4HE 37/4 ANALYSIS STARTS WITH AN ANALYSIS OF THE /-) 4HIS

MEANS ANALYSING WHERE THE /-) IS POSITIONED IN THE MARKET 4HIS
ANALYSIS SHOULD TAKE INTO ACCOUNT THE SPECIAL ABILITIES AND LIMITATIONS
OF THE /-) 4HE SAME PROCEDURE SHOULD BE FOLLOWED FOR THE ANALYSIS
OF THE MAIN COMPETITORS ! COMPARISON OF THE STRENGTHS AND WEAK
37/4 ANALYSIS
!NALYSIS OF THE PRESENT SITUATION !NALYSIS OF FUTURE DEVELOPMENTS
!NALYSIS OF FUTURE TRENDS

IN THE MACRO
!NALYSIS OF !NALYSIS OF AND MICRO ENVIRONMENT
THE /-) THE MAIN COMPETITORS
!NALYSIS OF
STRENGTHS AND WEAKNESSES OF
THE /-)
COMPARED WITH COMPETITORS
/PPORTUNITIES AND THREATS OF

THE /-) IN THE FUTURE
&IGURE 37/4 3TRENGTH n 7EAKNESSES n /PPORTUNITES n 4HREATS ANALYSIS

3OURCE (!--

NESSES OF THE /-) WITH THE STRENGTHS AND WEAKNESSES OF THE MAIN
COMPETITORS WILL REVEAL THE ADVANTAGES OF THE /-) VIS Í VIS ITS MAIN
COMPETITORS !S SHOWN IN &IGURE THE 37/4 ANALYSIS ALSO INCLUDES
AN ANALYSIS OF FUTURE TRENDS IN THE MACRO AND MICRO ENVIRONMENT )T
IS THEN THE TASK OF THE /-) INITIATORS TO lND A CONNECTION BETWEEN
THE TRENDS OF THE FUTURE ANALYSIS AND THE STRENGTHS AND WEAKNESSES OF
THE /-) )F FOR EXAMPLE THE FUTURE ANALYSIS SHOWS THAT THE CUSTOMER
PREFERS REGIONAL PRODUCTS AND ONE OF THE STRENGTHS OF THE /-) IS PRO
DUCTION OF A PRODUCT WITH A STRONG REGIONAL AFlNITY AN OPPORTUNITY
IS OBVIOUS !N EXAMPLE OF A THREAT MIGHT BE WHERE THE CUSTOMER IS
ASKING FOR A WIDE PRODUCT FAMILY BUT THE /-) ONLY PRODUCES ONE OR
TWO PRODUCTS WITHIN A PRODUCT FAMILY
"OTH THE EVALUATION OF STRENGTHS AND WEAKNESSES AND THE EVALU

ATION OF OPPORTUNITIES AND THREATS GIVE THE /-) RELEVANT INFORMATION
REGARDING THE WAY THE TYPE OF PRODUCTS TYPE OF PARTNERS AND TYPE OF
ORGANISATIONAL AND MARKETING STRUCTURE AN /-) NEEDS TO ACT SUCCESS
FULLY IN THE START UP SITUATION
#ONDUCTING A 37/4 ANALYSIS IS RECOMMENDED NOT ONLY IN

REGULAR THE PLANNING PHASE OF AN /-) )T SHOULD BE REPEATED PERIODICALLY
REPETITION OF IN ORDER TO ADAPT STRATEGIC PLANNING ACCORDING TO CHANGING MARKET
37/4 ANALYSIS ENVIRONMENTS COMPETITOR PERFORMANCE OR CHANGES IN ONES OWN PO
TENTIALS AND LIMITATIONS SEE ALSO CHAPTER
&INALLY ANOTHER PART OF AN INITIAL ROUGH MARKET ANALYSIS IS TO

ESTABLISH WHO WILL BE THE STAKEHOLDERS AND THE KEY ACTORS 3TAKEHOLD
ERS ARE PEOPLE THAT HAVE AN INTEREST IN THE NEW BUSINESS &OR EXAMPLE
THEY MAY BE TRUSTEES VOLUNTEERS OR PEOPLE FROM OUTSIDE THE BUSINESS
IDENTIFY LIKE PRIVATE INVESTORS )T IS NECESSARY TO IDENTIFY THE STAKEHOLDERS AND
STAKEHOLDERS TO GIVE THEM SPECIAL ATTENTION 4HE KEY ACTORS SHOULD MANAGE THE DE
AND KEY ACTORS VELOPMENT OF THE NEW BUSINESS %SPECIALLY IN A CO OPERATIVE VENTURE
WHERE MORE PEOPLE WORK TOGETHER IT IS ESSENTIAL TO APPOINT A MAIN
PERSON AS THE KEY ACTOR )T IS ALSO IMPORTANT TO DElNE EXACTLY THE TASK
OF EVERY KEY ACTOR 0OSSIBLE CONmICTS CAN THUS BE AVOIDED FROM THE
BEGINNING
&EASIBILITY STUDY BUSINESS PLAN

!FTER A lRST ROUGH MARKET ANALYSIS IT SHOULD BE CLEAR WHETHER THERE

0RE START PHASE
FOLLOWING QUESTIONS
Q 7HO ARE OUR CUSTOMERS
Q 7HO ARE OUR COMPETITORS
Q 7HO CAN BE SUPPLIERS
Q )S THERE A MARKET FOR THE PRODUCT WE WILL PRODUCE
Q $O WE HAVE ENOUGH lNANCIAL AND HUMAN RESOURCES
Q 7HAT ARE OUR STRENGTHS AND WEAKNESSES IN COMPARISON TO OUR
MAIN COMPETITORS
Q (OW CAN WE TURN OUR STRENGTHS INTO OPPORTUNITIES
Q 7HERE ARE POSSIBLE THREATS
Q 7HO WILL BE STAKEHOLDERS
Q 7HO WILL BE A KEY ACTOR OF THE /-)
IS A MARKET FOR THE PRODUCT OR SERVICES THE /-) WILL PRODUCE .OW IT
IS NECESSARY TO CONCRETISE THE WHOLE IDEA AND TEST WHETHER THE IDEA IS
REALISABLE ! BUSINESS PLAN CAN THEREFORE BE VERY HELPFUL ! BUSINESS
PLAN IS A WRITTEN DOCUMENT THAT DESCRIBES ALL THE RELEVANT EXTERNAL
AND INTERNAL ELEMENTS INVOLVED IN STARTING AN /-) 4HE BUSINESS PLAN
WILL BE PREPARED BY THE /-) INITIATORS
"EFORE EXPENDING A GREAT DEAL OF TIME AND ENERGY ON PREPARING

A BUSINESS PLAN THE /-) INITIATORS SHOULD CARRY OUT A SHORT FEA
SIBILITY STUDY ! FEASIBILITY STUDY INCLUDES RESEARCH TO DETERMINE THE FEASIBILITY STUDY
ECONOMIC FEASIBILITY OF A PROPOSED BUSINESS "ASED ON THIS FEASIBILITY TO IDENTIFY
STUDY THE /-) INITIATORS WILL SEE IF THERE ARE ANY POSSIBLE BARRIERS BARRIERS
TO SUCCESS 4HE STUDY SHOULD CONTAIN A MARKET EVALUATION OF THE LOCAL TO SUCCESS
ECONOMY DEMOGRAPHICS ACCESSIBILITY AND INFORMATION ON POTENTIAL
LOCAL COMPETITORS )T SHOULD ALSO INCLUDE THE MARKET POTENTIAL FOR THE
PROPOSED /-) PRODUCTS
&IRST OF ALL THE /-) INITIATORS NEED TO KNOW WHETHER THERE IS MARKET
MARKET POTENTIAL FOR THE NEW PRODUCTS OR SERVICES )T IS THEREFORE NEC INFORMATION
ESSARY TO DElNE THE MARKET 4HE /-) INITIATORS MUST ASCERTAIN FOR
EXAMPLE IF THE PRODUCT IS MOST LIKELY TO BE PURCHASED BY SINGLE PEO
PLE YOUNG FAMILIES WITH CHILDREN PEOPLE WITH A HIGH INCOME OR LOW
INCOME HIGHLY EDUCATED OR LESS EDUCATED PEOPLE ETC 4HIS INFORMA

@.APFMILCH 3WITZERLAND
3MALLER INVESTMENT WITH GREATER mEXIBILITY AND LOWER COSTS
"EFORE STARTING TO PRODUCE FRESH HERB CHEESE IT WAS NECESSARY TO
MAKE A BUSINESS AND INVESTMENT PLAN TO OBTAIN MONEY FROM BANKS
FOR THEIR MILK PROCESSING UNIT 4HIS STUDY WAS PREPARED BY lNANCE
SPECIALISTS WHO HAVE BEEN TAKEN ONTO THE BOARD OF THEIR LIMITED COM
PANY ONE OF THEM HAS BEEN A DIRECTOR OF A LARGE DAIRY CO OPERATIVE
AND A UNIVERSITY LECTURER ON MARKET CO OPERATION !S A CONSEQUENCE
INSTEAD OF INVESTING IN AN EXPENSIVE NEW BUILDING FOR CHEESE PROCESS
ING IT WAS DECIDED TO INVEST IN THE RECONSTRUCTION OF EXISTING BUILDINGS
FOR HALF THE COST 4HE CONSTRUCTION AND PROCESSING EQUIPMENT AS A
RESULT WAS RATHER SMALL AND SEEMED LESS ECONOMICAL "UT THE ADVAN
TAGE OF THIS SMALL OPERATION WAS LATER REVEALED THE PROCESSOR IS MUCH
MORE mEXIBLE AND CAN PRODUCE ALL KINDS OF HERB CHEESE SPECIALITIES
TION CAN OFTEN BE FOUND IN MARKET RESEARCH STUDIES PUBLISHED ON THE

INTERNET BOOKS PERIODICALS OR NEWSPAPERS )N ADDITION APPROACHING
TRADE ASSOCIATIONS COLLEGES OR UNIVERSITIES CAN ALSO BE HELPFUL
&URTHERMORE THE TYPE OF PROCESSOR REQUIRED BY THE /-)S

PRODUCTS BOTH INSIDE AND OUTSIDE THE REGION NEEDS TO BE ESTABLISHED
)N ADDITION AN INITIAL ROUGH EXPLORATION OF THE MARKET SHOULD ASSESS
THE FORM AND CHARACTERISTICS OF PRODUCTS POTENTIAL MARKET PARTNERS
EXPECT )F FOR EXAMPLE A LOCAL CANTEEN IS INTERESTED IN PURCHASING
REGIONAL ORGANIC PRODUCTS IT MUST BE CLARIlED WHETHER THE CANTEEN
WOULD BE ABLE TO PROCESS THE PRODUCTS BY THEMSELVES OR WHETHER THE
/-) MUST ASSUME THIS TASK )F ONE KNOWS THIS THEN ONE KNOWS THE TO
TAL MARKETING COSTS AND THE NATURE AND SCALE OF INVESTMENT NEEDED
$EPENDING ON THE NATURE OF THE /-) SPECIAL OPERATIONAL NEEDS

OPERATIONAL MAY BE REQUIRED 4HE FOLLOWING POINTS MAY BE RELEVANT AND INFORMA
NEEDS TION ON THEM MUST BE GATHERED
/BTAINING ALL THIS INFORMATION SHOULD NOT BE DIFlCULT 4HE

/-) INITIATORS WILL BE ABLE TO OBTAIN THE NECESSARY INFORMATION
THROUGH DIRECT CONTACT WITH THE APPROPRIATE SOURCES

0RE START PHASE
,OCATION ACCESSIBILITY TO CUSTOMERS SUPPLIERS AND

DISTRIBUTORS
-ANUFACTURING DRAWING UP A LIST OF ALL BASIC MACHINES AND
OPERATIONSEQUIPMENT ASSEMBLY OPERATIONS REQUIRED
2AW MATERIALS DRAWING UP A LIST OF ALL RAW MATERIALS THAT
NEED TO BE SUPPLIED
DRAWING UP A LIST OF SUPPLIERS
,ABOUR SKILLS DRAWING UP A LIST OF EACH UNIQUE SKILLPERSON
REQUIRED
DRAWING UP A LIST OF PAY RATES
3PACE DRAWING UP A LIST OF THE NECESSARY SPACE
EG FOR AN OFlCE AND INFORMATION REGARDING
WHETHER THE SPACE WILL BE OWNED OR RENTED
/VERHEADS DRAWING UP A LIST OF EVERYTHING THAT IS NECES
SARY TO SUPPORT MANUFACTURING OPERATIONS
EG COMPUTER OFlCE EQUIPMENT ETC
&INALLY IT IS NECESSARY TO CARRY OUT A COMPLETE EVALUATION OF THE PROF lNANCIAL

ITABILITY OF THE /-) 3UCH AN EVALUATION WILL PROVIDE INFORMATION INFORMATION
ABOUT
Q THE PROlTABILITY OF THE /-) INTERESTING FOR POTENTIAL INVES
TORS
Q THE AMOUNT OF MONEY NEEDED TO LAUNCH THE /-)
Q SHORT TERM lNANCIAL NEEDS
Q WHERE THE MONEY IS COMING FROM HOW MUCH CAPITAL RESOURCES
HOW MUCH BORROWED CAPITAL ETC
4HERE ARE THREE MAIN AREAS FOR ASSESSING THE lNANCIAL FEASIBILITY OF AN
/-)
Q EXPECTED SALES AND EXPENDITURE lGURES FOR AT LEAST THREE YEARS
Q CASH mOW lGURES FOR THE lRST THREE YEARS
Q CURRENT BALANCE SHEET lGURES AND PRO FORMA BALANCE SHEET l
GURES FOR THE lRST THREE YEARS
!LL DATA SHOULD BE BASED ON THE MARKET INFORMATION PREVIOUSLY COL

LECTED

@"IOLAIT &RANCE
,AUNCHED WITH AN UNFAVOURABLE FEASIBILITY STUDY
"IOLAIT WAS FOUNDED BY SIX ORGANIC MILK PRODUCERS AT THE END OF
"IOLAIT PLAYS THE ROLE OF A MIDDLEMAN AS ITS MAIN ACTIVITY IS TO ORGAN
ISE THE COLLECTION OF ORGANIC MILK AND THEN TO SELL IT TO PROCESSORS
)N ORGANIC MILK PRODUCERS IN MANY REGIONS WERE UNABLE TO SELL
THEIR ORGANIC MILK WITH ADDED VALUE 4HE ORGANIC MILK PRODUCERS BEGAN
CONSIDERING WAYS OF COLLECTING ORGANIC MILK IN THEIR REGION $IFFERENT
POSSIBILITIES WERE CONSIDERED EG TO CREATE COMMERCIAL LINKS WITH A
FEW SPECIlC DAIRIES TO WORK AND CREATE A LONG TERM PARTNERSHIP WITH
ONE SINGLE FAMILY DAIRY ETC .EVERTHELESS NONE OF THESE PROJECTS WAS
SUCCESSFULLY COMPLETED
4WO YEARS LATER IN ON THE INITIATIVE OF A #HAMBER OF !GRICULTURE
A FEASIBILITY STUDY WAS CARRIED OUT TO EXAMINE THE POSSIBLE CREATION
OF A COLLECTING GROUP SPECIALISED IN ORGANIC MILK IN PARTNERSHIP WITH
SOME INDUSTRIAL PROCESSORS 4HE STUDY RECOMMENDATIONS WERE NOT
IN FAVOUR OF CREATING SUCH A PRODUCERS COLLECTING GROUP (OWEVER
THE STUDY WAS REGARDED AS NOT FULLY CONCLUSIVE WHICH RENDERED THIS
PROJECT NOT COMPLETELY IMPOSSIBLE AND SO THE ORGANIC MILK PRODUC
ERS DECIDED TO GO AHEAD NEVERTHELESS AND SET UP "IOLAIT AT THE END
OF )N "IOLAIT INCLUDED ORGANIC MILK PRODUCERS AND
COLLECTED OF THE TOTAL DOMESTIC ORGANIC MILK PRODUCTION MIL
LION LITRES (OWEVER IN "IOLAIT FACED SEVERE ECONOMIC PROBLEMS
DUE TO COMPETITION FROM LARGE CONVENTIONAL DAIRY COMPANIES OFFERING
PRICES THAT ARE MORE ATTRACTIVE FOR FARMERS AND RETAILERS AND SOME
TIMES EVEN A CONVERSION PREMIUM SOMETIMES FOR THE ACKNOWLEDGED
PURPOSE OF HARMING "IOLAIT 3OURCE ).2! ,E -ANS &RANCE
! BUSINESS PLAN PRECISELY DElNES YOUR BUSINESS IDENTIlES YOUR

7HAT DOES A GOALS AND SERVES AS YOUR /-)S RESUME )T HELPS YOU ALLOCATE RE
BUSINESS PLAN SOURCES PROPERLY HANDLE UNFORESEEN COMPLICATIONS AND MAKE GOOD
MEAN BUSINESS DECISIONS "ECAUSE IT PROVIDES SPECIlC AND ORGANISED INFOR
MATION ABOUT YOUR /-) AND HOW YOU WILL REPAY BORROWED MONEY
A GOOD BUSINESS PLAN IS A CRUCIAL PART OF ANY LOAN APPLICATION !DDI
TIONALLY IT INFORMS SALES PERSONNEL SUPPLIERS AND OTHERS ABOUT YOUR
OPERATIONS AND GOALS

0RE START PHASE
4HE BUSINESS PLAN HAS FOUR MAIN TASKS 4HESE TASKS CAN BE DE
SCRIBED AS
Q PROVIDING THE /-) INITIATORS WITH AN EXACT VIEW OF ALL AREAS
OF THE /-) THAT ARE RELEVANT FOR SUCCESS @7HAT MUST THE /-)
INITIATORS THINK ABOUT
Q AN OUTLINE OF THE BUSINESS IDEA AND DIFFERENT POSSIBILITIES @)S THE
IDEA REALISABLE
Q MID TERM PLANNING WITH A WRITTEN CONCEPT AS A BASIS FOR IMPLE
MENTATION @(OW WILL THE IDEA BE IMPLEMENTED
Q MID TERM lNANCING CONSISTING OF A COLLECTION OF ALL lNANCING
OPTIONS @(OW WILL THE PROJECT BE lNANCED
! LOT OF LITERATURE EXISTS ABOUT HOW A BUSINESS PLAN MIGHT LOOK

AND HOW TO DEVELOP A BUSINESS PLAN (ELPFUL EXAMPLES OF BUSINESS
PLANS CAN ALSO BE FOUND ON THE INTERNET &OR THIS REASON THE FOLLOWING
TEXT INCLUDES ONLY THE MAIN ITEMS COVERED IN A BUSINESS PLAN
4HE BUSINESS PLAN STARTS WITH A COVERING PAGE 4HIS PAGE SHOULD 7HAT SHOULD
CLEARLY IDENTIFY WHO WROTE THE PLAN AND ALL CONTACT DETAILS ! STATE CONTAIN THE
MENT OF THE PLANS CONlDENTIALITY IS ALSO ADVISABLE 4HE COVERING PAGE COVERING PAGE
IS FOLLOWED BY THE EXECUTIVE SUMMARY 4HE EXECUTIVE SUMMARY IS ONE
OF THE MOST IMPORTANT PARTS OF THE BUSINESS PLAN "Y SUMMARISING THE
HIGHLIGHTS OF THE NEW /-) IT SHOULD BE POSSIBLE TO GRAB THE ATTENTION
OF THE READER )T MAKES SENSE TO WRITE THE TWO TO THREE PAGE EXECU
TIVE SUMMARY AFTER THE WHOLE PLAN HAS BEEN WRITTEN 4HE SUMMARY
SHOULD INCLUDE
Q A SHORT DESCRIPTION OF THE BUSINESS
Q ADVANTAGE OVER COMPETITORS THE SPECIlC IDEAPRODUCTS BEHIND
THE /-) 7HAT SHOULD
Q THE LEGAL STRUCTURE OF THE /-) CONTAIN THE
Q OVERVIEW OF ACHIEVEMENTS LIKE PATENTS CONTRACTS MARKET RE EXECUTIVE
SEARCH ETC SUMMARY
Q BRIEF INTRODUCTION TO THE MANAGEMENT TEAM
Q BRIEF OUTLINE OF THE lNANCIAL PLAN CAPITAL INVESTMENT CAPITAL
RESOURCES AND AMOUNT OF EXPECTED BORROWED CAPITAL
)T IS NECESSARY FOR THE /-) INITIATORS TO EXPLAIN IN A NUTSHELL

THE IMPORTANT DETAILS OF THE /-) TO THE AUDIENCE AT WHOM THIS PLAN
IS AIMED

! BUSINESS PLAN HAS TO DElNE THE /-) BUSINESS PRECISELY 0HOTO - -ORGNER
DESCRIPTION OF 4HE NEXT ITEMS IN THE BUSINESS PLAN ARE THE MANAGEMENT TEAM
THE ORGANISA PROlLES AND THE OWNERSHIP STRUCTURE 4HIS SECTION SHOULD COVER THE
TIONAL STRUCTURE FOLLOWING
Q MAJOR CATEGORIES OF BUSINESS MANAGEMENT IN THE /-) FOR EX

AMPLE SALES MARKETING ETC
Q WHO ELSE IS WORKING FOR THE /-) WHAT ARE THEIR JOB DESCRIP
TIONS
Q PERSONAL SKILLS OF THE /-) INITIATORS
Q DESCRIPTION OF WORK CONTRACTS NON COMPETITION AGREEMENTS
ETC
Q DESCRIPTION OF THE OWNERSHIP STRUCTURE OF THE /-)
Q BRIEF INTRODUCTION TO ADVISORS AND PROFESSIONAL SERVICES FOR
EXAMPLE CONSULTANTS COLLEGES LAWYER BANKER ETC

0RE START PHASE
Q HUMAN RESOURCES REQUIREMENTS DETAILS OF OTHER EMPLOYEES THE

/-) MAY NEED IN THE FUTURE FOR EXAMPLE DETAILS OF SKILLS THAT
MAY BE NEEDED COMPENSATION PACKAGES SALARIES ETC
4HIS SECTION IS FOLLOWED BY THE BUSINESS SUMMARY AND HISTORY BUSINESS

)N THE HISTORY THE WORK DONE SO FAR SHOULD BE OUTLINED ! DESCRIPTION SUMMARY AND
OF THE INDIVIDUAL PARTNERS OF THE /-) THEIR BACKGROUND AND THEIR HISTORY
CONTRIBUTION TO THE DEVELOPMENT OF THE /-) SHOULD ALSO BE PART OF
THIS CHAPTER &URTHER ON IT IS IMPORTANT TO GIVE SOME BACKGROUND
ABOUT THE MARKET THE /-) WILL OPERATE IN FOR EXAMPLE IF THE /-) IS
PRODUCING AND SELLING ORGANIC MEAT IT IS ADVISABLE TO INCLUDE INFOR
MATION ON THE ORGANIC MEAT MARKET AND ITS PROSPECTS
4HE BUSINESS SUMMARY SHOULD GIVE INFORMATION ABOUT THE

/-) 4HE FOLLOWING POINTS SHOULD BE MENTIONED
Q DESCRIPTION OF THE PRODUCT INCLUDING AN HONEST ASSESSMENT OF

STRENGTHS AND WEAKNESSES
Q DESCRIPTION OF THE COMPETITORS STRENGTHS AND WEAKNESSES MAR
KET SHARE ETC
Q DESCRIPTION OF BARRIERS TO ENTERING THE MARKET
4HE NEXT IMPORTANT ITEM OF THE BUSINESS PLAN IS THE DESCRIP DESCRIPTION
TION OF THE TARGET MARKET 4HIS CHAPTER SHOULD GIVE AN EXPLANATION OF THE TARGET
OF THE TYPE OF BUSINESS OR PERSON THAT IS LIKELY TO BUY THE PRODUCT MARKET
AND HOW LARGE THE MARKET IS 4HIS EXPLANATION SHOULD ALSO INCLUDE
DEMOGRAPHIC DATA ON THE TARGET GROUP !DDITIONALLY IT IS NECESSARY TO
EXPLAIN ANY TRENDS THAT ARE AFFECTING THE TARGET MARKET FOR THE PROD
UCT ! DESCRIPTION OF DIRECT AND INDIRECT COMPETITORS IS ALSO USEFUL
0OINTS SUCH AS TRENDS IN THE MARKET GROWTH PROSPECTS OF THE MARKET
SEASONAL FACTORS THAT MAY AFFECT THE MARKET ETC SHOULD BE OUTLINED
4HE DESCRIPTION OF THE MARKETING PLAN IS ALSO AN IMPORTANT DESCRIPTION OF

ITEM OF THE BUSINESS PLAN !T THIS POINT THE READER SHOULD lND IN THE MARKETING
FORMATION ABOUT THE PRODUCT THE PRICE THE DISTRIBUTION AND THE PLAN
COMMUNICATION THAT IS PLANNED 4HE SECTION ON PRODUCT INFORMA
TION SHOULD INCLUDE ALL IMPORTANT ASPECTS OF THE PRODUCTS OR SERVICES
THE /-) PLANS TO PRODUCE 4HIS SECTION SHOULD PRIMARILY ANSWER THE
QUESTION @7HAT IS THE ONE THING ABOVE ALL ELSE THAT MAKES THE PRODUCT

UNIQUE AND @7HY SHOULD THE CUSTOMER BUY THE /-)S PRODUCTS AND
SERVICES AND NOT THOSE OF ITS COMPETITORS )N ADDITION ASPECTS SUCH AS
PACKAGING QUALITY AND ANY SPECIAL SERVICES SHOULD BE MENTIONED 4HE
PRICING SECTION SHOULD EXPLAIN THE WAY IN WHICH THE /-) ESTABLISHED
THE BASE PRICE FOR THE PRODUCT AND ALL IMPORTANT FACTS ABOUT THE PRICE
FOR EXAMPLE HOW THE PRICE COMPETES WITH THE MARKET PRICE WHY IT
IS HIGHER OR LOWER ETC ! PLAN DETAILING HOW TRANSACTIONS BETWEEN
THE /-) AND THE CUSTOMER WILL BE MANAGED IS VITAL IN THE CONTEXT
OF THE DISTRIBUTION PLAN &INALLY A COMMUNICATION PLAN WILL EXPLAIN
IN DETAIL HOW THE /-) IS GOING TO COMMUNICATE THE PRODUCT TO THE
CUSTOMER
%VERY NEW PRODUCT OR EVERY NEW /-) WILL FACE SOME POTENTIAL
ASSESSMENT OF RISKS 4HEREFORE THE ASSESSMENT OF THREATS IS ALSO A PART OF THE BUSI
THREATS NESS PLAN 4HIS SECTION SHOULD INCLUDE A DESCRIPTION OF POTENTIAL HAZ
ARDS AND ALTERNATIVE STRATEGIES TO MEET THE OBJECTIVES OF THE /-)
4HE lNANCIAL SECTION IS THE OPPORTUNITY TO DETERMINE THE EXTENT

DESCRIPTION TO WHICH THE /-) IS lNANCIALLY VIABLE 'ENERALLY THERE ARE THREE l
OF THE lNANCIAL NANCIAL AREAS DISCUSSED IN THIS PART OF THE BUSINESS PLAN 4HESE THREE
SITUATION AREAS ARE
Q THE FORECAST SALES AND THE APPROPRIATE EXPENSES FOR THE lRST
THREE YEARS lRST YEARS PROJECTION SHOULD BE GIVEN ON A
MONTHLY BASIS
Q CASH mOW lGURES FOR THE lRST THREE YEARS lRST YEARS MONTHLY
PROJECTION
Q PROJECTED BALANCE SHEET TO SHOW THE STATE OF THE /-) AT A
SPECIlC TIME
&INALLY THE LAST SECTION OF THE BUSINESS PLAN IS THE APPENDIX 4HE
APPENDIX WITH APPENDIX MAINLY INCLUDES BACK UP MATERIAL THAT IT IS NOT NECESSARY
REFERENCES TO INCLUDE IN THE TEXT OF THE BUSINESS PLAN 4HESE MATERIALS MAY FOR
EXAMPLE BE LETTERS FROM CUSTOMERS DISTRIBUTORS SUPPLIERS ETC )N THE
PLAN ITSELF REFERENCE SHOULD BE MADE TO EACH OF THE DOCUMENTS IN THE
APPENDIX

$ECISION
FOLLOWING QUESTIONS
Q $OES THE FEASIBILITY STUDY SHOW KEY BARRIERS TO THE SUCCESS OF
THE /-)
Q (AS A COMPLETE BUSINESS PLAN BEEN DEVELOPED
$ECISION TO START OR NOT TO START
!FTER ELABORATION OF THE ABOVE DOCUMENTS THE DECISION TO START 2EADY TO START
OR NOT TO START SHOULD NOT BE VERY DIFlCULT (OWEVER THE FOLLOWING
CHECKLIST SUMMARISES ALL THE IMPORTANT ITEMS AGAIN 4HE CHECKLIST ON
THE NEXT TWO PAGES SHOULD HELP TO PROVIDE AN OVERVIEW AND FACILITATE
A DECISION ON WHETHER THE CONCEPT IS READY FOR STARTING UP THE BUSI
NESS
@,UOMUBOTNIA @0IRKANMAAN ,UOMUTUOTTAJAT AND @3AIMAAN

,UOMU &INLAND
3UPPORT IN THE PRE START PHASE WITH TRAINING COURSES FOR CO OPERA
TIVE MARKETING
)N THESE THREE CASES GROUPS OF FARMERS HELD DISCUSSIONS AND DECIDED
TO FORM A FARMERS COMPANY TO SELL ORGANIC PRODUCTS 4HE IDEA WAS
SUPPORTED BY PROVIDING TRAINING COURSES ABOUT CO OPERATION AND NET
WORKING IN MARKETING ACTIVITIES 7ORKING TOGETHER WAS SEEN AS ONE
SOLUTION TO THE SITUATION WHERE THEY ALL HAD MORE VOLUME TO SELL THAN
COULD EASILY BE HANDLED ALONE 4HE DECISION TO START TO WORK AND HAN
DLE THE MARKETING TOGETHER WAS BASED ON THE IDEA OF GETTING A BETTER
PRICE WHILE WORKING TOGETHER 3OME FARMERS MAY HAVE HAD MORE EX
PERIENCE ON MARKETING ISSUES BUT THE DECISION WAS BASED MAINLY ON
TRUST BETWEEN THE FARMERS WHO KNEW EACH OTHER
3OURCE 5NIVERSITY OF (ELSINKI -IKKELI )NSTITUTE FOR 2URAL 2ESEARCH AND
4RAINING &INLAND

#HECK LIST 9ES.O #RITERIA 7HO 7HEN

6ISION BUSINESS IDEA
)S THE VISION CONCRETELY DElNED AND WRITTEN DOWN
)S THE BUSINESS IDEA CONCRETELY DElNED AND WRITTEN
DOWN
$OES THE BUSINESS IDEA SOUND REALISABLE
0OTENTIAL SUPPORT
!RE THERE POTENTIAL CO OPERATION PARTNERS INTERESTED
IN THE BUSINESS THE /-)
!RE THESE CO OPERATION PARTNERS SUITED TO THE BUSI
NESS IDEA AND WILL THEY ACHIEVE THE FOLLOWING
Q PRODUCING THE PRODUCT NEEDED
Q PRODUCING THE QUALITY NEEDED
Q PRODUCING THE QUANTITY NEEDED
Q SHORT DISTANCE BETWEEN THE CO OPERATION PART
NERS
Q STILL COUNTING ON REGIONALISM
7ILLINGNESS TO GIVE UP OR SHARE SOLE AUTHORITY
Q TO SET ASIDE RIVALRIES
Q OPENNESS
Q TRUST IN PARTNERS
Q MAKING SURE INFORMATION IS FORWARDED
)S THE BUSINESS OF THE CO OPERATION PARTNER IN A GOOD
STATE OF ECONOMIC HEALTH
)S THE NUMBER OF CO OPERATION PARTNERS CLEARLY IDENTI
lED
)S IT POSSIBLE TO OBTAIN BUSINESS SUPPORT EG FROM
COLLEGES OR UNIVERSITIES
)S IT POSSIBLE TO OBTAIN GOVERNMENT SUPPORT
)S THERE SUPPORT FROM OPINION LEADERS LIKE
Q PRESSMEDIA
Q ASSOCIATIONSORGANISATIONS
)S THERE SUPPORT FROM PEOPLE IN THE IMMEDIATE BUSI
NESS ENVIRONMENT EG LENDERS SUPPLIERS BUYERS
$OES THE FAMILY SUPPORT THE /-) INITIATORS

$ECISION
#HECK LIST 9ES.O #RITERIA 7HO 7HEN

&ORMULATION OF CONCRETE OBJECTIVES
!RE THE OBJECTIVES DElNED CLEARLY AND PRECISELY
!RE THE OBJECTIVES
Q MEASURABLE
Q ACHIEVABLE
Q REALISTIC
Q TIME BASED
Q COMMUNICABLE
)S IT POSSIBLE TO ELIMINATE COMPETITION BETWEEN
OBJECTIVES
)S THERE A CLEAR HIERARCHY OF THE DIFFERENT OBJECTIVES
OF ALL CO OPERATION PARTNERS
&IRST ROUGH MARKET ANALYSIS
(AS SUFlCIENT INFORMATION ABOUT THE CUSTOMERS
BEEN GATHERED
(AS SUFlCIENT INFORMATION ABOUT THE COMPETITORS
BEEN GATHERED
)S lNANCING CLEARLY DElNED
Q INTERNAL CAPITAL RESOURCES
Q BORROWED CAPITAL POSSIBILITIES
37/4 ANALYSIS
!RE STRENGTHS CLEARLY IDENTIlED
!RE WEAKNESSES CLEARLY IDENTIlED
!RE OPPORTUNITIES CLEARLY IDENTIlED
!RE THREATS CLEARLY IDENTIlED
)S THE BUSINESS IDEA BACKED UP BY THE RESULTS
OF THE 37/4 ANALYSIS
4HE ANSWER TO ALL QUESTIONS SHOULD BE @YES 1UESTIONS TO WHICH

THE ANSWER IS @NO SHOULD BE ANALYSED AGAIN AND THE REASON FOR THE @NO
SHOULD BE FOUND )F NECESSARY SOME POINTS IN THE PROCESS OF THE PRE
START PHASE SHOULD BE MODIlED AGAIN

3TART UP PHASE
-ARKETING PLANNING
!FTER DECIDING TO ENTER INTO THE @3TART UP PHASE THE MARKETING INITIA
TIVE MUST ELABORATE A DETAILED PLAN OF STRATEGIC OBJECTIVES MARKETING
STRATEGIES AND MARKETING INSTRUMENTS
)N A SYMBOLIC WAY THE MARKETING PLANNING PROCESS WORKS

THE ROUTE SIMILARLY TO A ROUTE PLANNING PROCESS &IRST OF ALL THE OBJECTIVE OR
PLANNING PROCESS DESTINATION MUST BE DElNED @7HERE DO WE WANT TO GO n -ARKETING
/BJECTIVE 3ECONDLY THERE ARE OFTEN DIFFERENT WAYS OF REACHING THE
DESTINATION )T IS POSSIBLE FOR EXAMPLE TO CHOOSE THE MOST BEAUTI
FUL THE SHORTEST OR THE FASTEST ROUTE @7HICH WAY DO WE WANT TO GO
n -ARKETING 3TRATEGY ,AST BUT NOT LEAST THERE ARE DIFFERENT CARRIER
OPPORTUNITIES BY WHICH TO REACH THE DESTINATION @(OW DO WE WANT TO
GET THEREv n -ARKETING )NSTRUMENTS )T MUST BE DECIDED FOR EXAM
PLE WHETHER CAR BUS SHIP OR PLANE IS THE MOST EFFECTIVE AND EFlCIENT
WAY TO REACH THE DESTINATION SEE ALSO lGURE -ARKETING OBJECTIVES
STRATEGIES AND INSTRUMENTS MUST BE ELABORATED IN A CONSISTENT AND
RIGOROUS WAY )T IS LIKE A PUZZLE IN WHICH ONLY PIECES FROM THE SAME
PUZZLE ARE SUITABLE TO BUILD THAT PICTURE NOT PIECES FROM OTHER PUZ
ZLES
! 37/4 ANALYSIS ALLOWS AN /-) TO BETTER IDENTIFY MARKET PO

TENTIALS MARKET GAPS AND COMPETITORS )T SHOULD BE CONSIDERED WHEN
MARKETING HAS TO DElNE A SPECIlC AND UNIQUE MARKET POSITIONING FOR
AN /-) AND ITS PRODUCTS SEE DETAILS IN #HAPTER 4HE OUTCOME OF
THE 37/4 ANALYSIS SHOULD THEREFORE REmECT ALL STEPS OF THE MARKETING
PLANNING PROCESS
)T SHOULD BE NOTED AT THIS STAGE THAT THE 37/4 ANALYSIS AS WELL

AS THE MARKETING PLANNING PROCESS SHOULD BECOME THE @GUIDELINES FOR
NAVIGATING THROUGH /-) ACTIVITIES 4HIS SHOULD BE REVISITED PERIODI
CALLY IN ORDER TO ADAPT STRATEGIC PLANNING ACCORDING TO CHANGING MAR
KET ENVIRONMENTS COMPETITOR PERFORMANCE OR THE CHANGING NATURE
OF AN /-)S OWN POTENTIAL AND LIMITATIONS

3TART UP PHASE
&IGURE 4HE THREE DIMENSIONS OF MARKETING PLANNING
!S ALREADY EXPLAINED DEVELOPING THE MARKETING PROCESS MEANS

A STEP BY STEP PROCESS
4O CARRY OUT AN APPROPRIATE SITUATION ANALYSIS 7HERE ARE WE STEP BY STEP
7HAT INFORMATION DO WE NEED 7HAT DOES THE 37/4 ANALYSIS APPROACH
SHOW 7HAT DOES THE MARKET SEGMENT ANALYSIS SHOW
4O FORMULATE STRATEGIC MARKETING OBJECTIVES MARKET POLICY
7HAT MARKET SHARE DO WE WANT TO ACHIEVE 7HICH QUALITATIVE
OBJECTIVES DO WE WANT TO ACHIEVE 7HICH OTHER OBJECTIVES IN
CLUDING NON ECONOMIC OBJECTIVES DO WE WANT TO ACHIEVE
4O DEVELOP THE OVERALL STRATEGY OR DIFFERENT STRATEGIES FOR DIF
FERENT MARKET SEGMENTS 7HICH WAY DO WE WANT TO GO 7ITH
WHICH EXISTING ANDOR NEW PRODUCTS AND SERVICES WILL WE OPER
ATE NOW AND IN THE FUTURE
4O FORMULATE OPERATIVE MARKETING OBJECTIVES 7HAT QUANTITA
TIVE OBJECTIVES DO WE WANT TO ACHIEVE

4O BALANCE THE USE OF MARKETING INSTRUMENTS IN THE MARKET

ING MIX )N WHICH WAY SHOULD MARKETING INSTRUMENTS BE AP
PLIED
4O CLARIFY THE USE OF RESOURCES 7HAT lNANCIAL HUMAN AND
NATURAL RESOURCES CAN WE USE MOST EFlCIENTLY
4O DEVELOP THE MARKETING PLAN AND MARKETING MEASURES 7HAT
MUST BE DONE BY WHOM WHEN AND HOW
4O DETERMINE THE INDICATORS FOR MONITORING (OW WILL WE
MEASURE SUCCESS OR FAILURE
@"IOBAUERN 3ULZBERG !USTRIA

-ARKETING PLANNING WITHOUT RELYING ON PUBLIC SUPPORT
"EFORE THE ESTABLISHMENT OF "IOBAUERN 3ULZBERG A SMALL DAIRY CO OP
ERATIVE IN 6ORARLBERG PRODUCERS WERE INTEGRATED INTO A CONVENTIONAL
DAIRY CO OPERATIVE $UE TO ONGOING QUARRELS MAINLY CONCERNING THE
DIFFERENT PRICE LEVELS FOR ORGANIC AND CONVENTIONAL MILK THE SMALL BUT
WELL EDUCATED GROUP OF ORGANIC FARMERS BEGAN SEARCHING FOR ALTERNA
TIVES 4HE POSSIBILITY OF RENTING AN ABANDONED DAIRY NEARBY LED IN
TO THE SEPARATION OF THE ORGANIC PRODUCERS AND THE ESTABLISH
MENT OF THEIR OWN BUSINESS 4HIS CREATED SOCIAL DIFFERENCES AMONG
THE FARMERS COMMUNITY THE CONVENTIONAL DAIRY LOST EXPERIENCED
FUNCTIONARIES AS WELL AS QUITE A LARGE AMOUNT OF MILK
"EFORE STARTING THE DETAILED MARKETING PLANNING THERE WERE SEV
ERAL INTERNAL AND EXTERNAL FACTORS TO BE CONSIDERED 0RODUCTION AND
INVESTMENT COSTS MARKET POTENTIAL MARKETING CHANNELS INTERNAL
MANAGEMENT AND ORGANISATIONAL ISSUES EG COLLECTION OF THE MILK
WERE ANALYSED MAINLY BY THE INITIATORS THEMSELVES WITH THE SUPPORT
OF AN ORGANIC FARMERS ASSOCIATION )N ORDER NOT TO BUILD THE SUCCESS
OF THE NEW CO OPERATIVE ON PUBLIC lNANCIAL SUPPORT ALL CALCULATIONS
WERE ELABORATED WITHOUT CONSIDERING PUBLIC SUPPORT POSSIBILITIES
3AFEGUARDED BY INTENSIVE AND ACCURATE PLANNING IN THE PREPARATORY
PHASE IT WAS POSSIBLE TO PERSUADE PARTICIPATING FARMERS TO INVEST
TIME LABOUR AND MONEY IN THE NEW INITIATIVE WHICH ON THE ONE HAND
WAS QUITE RISKY BUT ON THE OTHER HAND HAD A MOTIVATIONAL EFFECT TOO
4O WORK FOR ONES OWN PROJECT APPEARS TO HAVE BEEN CRUCIAL AND CHAL
LENGING FOR THE VENTURES FURTHER DEVELOPMENT
3OURCE 5NIVERSITY OF )NNSBRUCK !USTRIA

3TART UP PHASE
#HEESE PROCESSING FOR @"IOBAUERN 3ULZBERG 0HOTO "IOBAUERN 3ULZBERG
)T IS IMPORTANT WHEN SETTING UP AN /-) TO LOOK AT THE INTERAC

TIONS BETWEEN DIFFERENT ELEMENTS OF THE MARKETING CONCEPT /F SPE
CIAL IMPORTANCE IS MONITORING ALL THE ABOVE STEPS
"ASED ON THE OVERALL OBJECTIVES OF THE /-) THE NEXT STEP IS TO STRATEGIC AND
DElNE STRATEGIC AND OPERATIONAL MARKETING OBJECTIVES SEE lGURE OPERATIONAL
3COPE FOR DElNING THESE OBJECTIVES HOWEVER IS LIMITED BY THE OUT MARKETING
COMES OF THE 37/4 ANALYSIS WITH REGARD TO OBJECTIVES
Q THE /-)S WILLINGNESS OPPORTUNITIES AND THREATS

Q THE /-)S EXPECTED MARKET POSITION LEADER CHALLENGER NICHE
PLAYER
Q THE BEHAVIOUR OF THE MAIN COMPETITORS

/VERALL OBJECTIVES OF AN /-)
3TRATEGIC MARKETING OBJECTIVES
-ARKETING STRATEGY
/PERATIONAL MARKETING OBJECTIVES
&IGURE 4HE ROLE OF STRATEGIC AND OPERATIONAL OBJECTIVES WITHIN THE MARKETING PLANNING
PROCESS 3OURCE &IGURE ADAPTED FROM (!--
#AREFUL CONSIDERATION MUST ALSO BE GIVEN TO ENSURING THAT MAR

KETING OBJECTIVES ARE NOT CONTRADICTORY TO THE PREDElNED OVERALL OB
JECTIVES OF THE /-) &OR INSTANCE COMMUNICATING AN AGGRESSIVE PRICE
STRATEGY AS A SUPPLIER WOULD NEED TO BE AVOIDED IF THE OVERALL OBJECTIVE
OF THE /-) MEMBERS WERE TO EARN HIGHER PRICES
0UT SIMPLY STRATEGIC OBJECTIVES CAN BE DESCRIBED AS THE LONG

SHORT TERM TERM GOALS OF AN /-) EG QUALITY LEADERSHIP FOR ORGANIC SPECIALITY
AND LONG TERM FOOD IN A CERTAIN REGION AND OPERATIONAL OBJECTIVES AS SHORT TERM
OBJECTIVES GOALS EG PLANNING TURNOVER EFFECTS BY MEANS OF CERTAIN SALES PROMO
TION ACTIVITIES
"OTH STRATEGIC AND OPERATIONAL OBJECTIVES MUST BE REGULARLY
EVALUATED AND IF NECESSARY ADAPTED TO THE CHANGING MARKET ENVI
RONMENT 4HIS IS ALSO RELEVANT TO THE START UP PHASE NOT ONLY TO THE
MATURING PHASE SEE ALSO LATER IN #HAPTER
4O DElNE STRATEGIC MARKETING OBJECTIVES THE MARKET IN WHICH

THE /-) INTENDS TO OPERATE MUST lRST BE DElNED AND BOUNDARIES

3TART UP PHASE
@&REILAND !SSOCIATION AND @&RISCH&REI DELIVERY SERVICE !USTRIA

#OMBINATION OF STRATEGIC OBJECTIVES FOR ANIMAL WELFARE AND DIS
TRIBUTION
7HEN THE &REILAND !SSOCIATION WAS FOUNDED IN BY A GROUP OF
VETERINARY STUDENTS ITS MAIN PURPOSE WAS TO UNDERTAKE PUBLIC RELA
TIONS WORK FOR ANIMAL WELFARE ALL OVER !USTRIA $UE TO ITS INCREASING
MEMBERSHIP AND POPULARITY THE ASSOCIATION WAS RESTRUCTURED IN
4HE @&RISCH&REI 'MB( WAS FOUNDED A DELIVERY SERVICE FOR
ORGANIC PRODUCTS IN 6IENNA
!NALYSIS OF THE SITUATION CARRIED OUT BY INITIATORS OF THE &REILAND
!SSOCIATION IN THE PRE START PHASE HAS SHOWN THAT AN APPROPRIATE
INFORMATION POLICY ON ITS OWN IS NOT SUFlCIENT TO MEET MEMBERS EX
PECTATIONS 4HEREFORE AN ECONOMICALLY INDEPENDENT DELIVERY SERVICE
WAS CREATED WHICH IS OWNED BY THE &REILAND !SSOCIATION
4HE COMBINATION OF INFORMATION POLICY AND DELIVERY SERVICE ESPECIALLY
IN BIG CITIES WHERE THERE SEEMS TO BE MORE AWARENESS OF ANIMAL WEL
FARE CONCERNS AND ORGANIC PRODUCTION CAN BE CONSIDERED AN INTEREST
ING SOLUTION IN TERMS OF COMBINING DIFFERENT STRATEGIC OBJECTIVES
WITH OTHER MARKETS ESTABLISHED )T IS NOT ENOUGH TO ONLY PLAN THE STRATEGIC
PRODUCT RANGE AND ITS INTENDED PERFORMANCE AT THIS STAGE 4HE MAIN OBJECTIVES GUIDE
TARGET GROUPSCUSTOMER GROUPS FOR THE PRODUCTS EG YOUNG FAMILIES /-) ACTIVITIES
THE CATERING INDUSTRY AND THE DISTRIBUTION AREA LOCAL REGIONAL NA OVER THE LONG
TIONAL INTERNATIONAL SHOULD ALSO BE DElNED TERM
@5+ 2IVERFORD 5NITED +INGDOM

! DECISION WAS MADE TO CUT DOWN THE AMOUNT OF PRODUCE GOING TO
SUPERMARKETS WHOLESALE IN ORDER TO CONCENTRATE ON HOME DELIVERY
SCHEME WHICH WAS LATER FURTHER DEVELOPED THOUGH ITS FRANCHISING
SYSTEM !CTIVELY SOUGHT GROWTH EG SET UP 3$/0 3OUTH $EVON /R
GANIC 0RODUCERS TO SOURCE MORE PRODUCE AND FRANCHISING TO EXPAND
ITS DELIVERY NETWORK 3OURCE 3CHOOL OF -ANAGEMENT AND "USINESS
5NIVERSITY OF 7ALES !BERYSTWYTH 5NITED +INGDOM

-ARKETING OBJECTIVES MUST BE EVALUATED REGULARLY 4HEY MUST

EVALUATION OF THEREFORE BE DElNED QUANTITATIVELY AND AS ACCURATELY AS POSSIBLE !N
MARKETING OBJECTIVE THAT SAYS @WE WANT TO BE BETTER THAN /-) 8 OR BRAND 9v OR
OBJECTIVES @WE WANT TO MAKE A PROlT THROUGH OUR ACTIVITIESv IS NOT CLEAR ENOUGH
AND NOT ONLY LACKS A CLEAR OBJECTIVE BUT ALSO MAKES IT IMPOSSIBLE TO
MONITOR
$UE TO THIS PRECONDITION STRATEGIC OBJECTIVES SHOULD BE TRANS
LATED INTO SINGLE OBJECTIVE PARAMETERS QUANTITY PARAMETERS AND TIME
PARAMETERS 4HE MORE QUANTITATIVELY AND PRECISELY THE OBJECTIVE PA
RAMETERS ARE DElNED THE EASIER IT IS TO MONITOR THEM &IGURE SHOWS
AN EXAMPLE OF HOW STRATEGIC OBJECTIVES CAN BE FURTHER ELABORATED
3TRATEGIC
OBJECTIVES
/BJECTIVE !MOUNT 4IME

PARAMETER PARAMETER PARAMETER
-AXIMISE 5P TO AT LEAST )N THE NEXT

PROFIT MARGIN YEARS
&IGURE %XAMPLE OF THE DElNITION OF A STRATEGIC OBJECTIVE
!S DISCUSSED IN #HAPTER THE STRATEGIC OBJECTIVES OF AN

/-) SHOULD NOT BE LIMITED STRICTLY TO ECONOMIC OBJECTIVES 4HEY
SHOULD ALSO INCLUDE QUALITY ECOLOGICAL ANDOR SOCIAL ASPECTS EG TO
GAIN QUALITY LEADERSHIP TO PROVIDE NEW JOBS )N ORGANIC MARKETING
INITIATIVES SOCIAL OBJECTIVES ARE OFTEN MORE IMPORTANT THAN ECONOMIC
OBJECTIVES WHICH OFTEN LIMITS PROlT OPPORTUNITIES EG AN /-) THAT
WORKS WITH DISABLED PEOPLE AN /-) THAT WISHES TO PROMOTE DIRECT
CONTACT BETWEEN PRODUCERS AND CONSUMERS AND THEREFORE STARTS A
PRODUCERCONSUMER ORGANISATION OR AN /-) WHOSE PRIMARY GOAL IS
THAT NOBODY WILL LOSE THEIR JOB EVEN IF THIS WOULD BE ADVISABLE FROM
AN ECONOMIC POINT OF VIEW
HIERARCHICAL SET 3ETTING PRIORITIES IN THE FORM OF A HIERARCHICAL SET OF OBJECTIVES

OF OBJECTIVES IS STRONGLY RECOMMENDED

3TART UP PHASE
@"IOLAIT &RANCE AND @"IOMILCHPOOL 3WITZERLAND

3OLIDARITY AMONG MEMBERS SOCIAL OBJECTIVE
4HE PRIMARY OBJECTIVE OF A NATIONWIDE MILK PRODUCING /-) EG
"IOLAIT OR "IOMILCHPOOL IS A SOCIAL ONE SOLIDARITY AMONG THE /-)S
MEMBERS 4HIS MEANS FOR EXAMPLE WHEN A SITUATION OF SURPLUS OR
GANIC MILK ARISES ALL /-) MEMBERS WOULD ACCEPT PRICE REDUCTIONS
OR PROVIDE ADDITIONAL CONTRIBUTIONS FOR SALES PROMOTION ACTIVITIES IN
ORDER TO INCREASE ORGANIC MILK DEMAND AGAIN .OBODY WOULD LEAVE
THE /-) IN ORDER TO EARN HIGHER PRICES BY SIGNING INDIVIDUAL CONTRACTS
WITH DAIRY COMPANIES 4HEREFORE IN THIS CASE THE OBJECTIVE OF MAXI
MISING PROlT FOR SINGLE FARMERS IS SECONDARY TO THE PRIMARY OBJECTIVE
OF SOLIDARITY AMONG /-) MEMBERS
3OURCE ).2! ,E -ANS &RANCE &I", &RICK 3WITZERLAND
Q 4HE OVERALL PRIMARY OR MAIN OBJECTIVE DETERMINES THE WAY TO

GO 0RIMARY OBJECTIVES SHOULD FOCUS IN ALL CASES ON A PRIORITY
AND THEREFORE DElNE THE FRAME FOR SECONDARY OBJECTIVES
Q 3ECONDARY OBJECTIVES ARE DIFFERENT 4HEY INDICATE THE STEPS TO
FOLLOW 3OME OF THESE SUB OBJECTIVES MAY BE DEPENDENT ON
WHETHER OTHER OBJECTIVES ARE ACHIEVED
/PERATIONAL OBJECTIVES MUST BE BASED ON STRATEGIC OBJECTIVES OPERATIONAL OB

4HEY CAN BE UNDERSTOOD AS A LIST OF MILESTONES ON THE PATH TOWARDS JECTIVES DEPEND
ACHIEVING STRATEGIC MARKETING OBJECTIVES 4HE MORE QUANTITATIVE THE ON STRATEGIC
OPERATIONAL OBJECTIVES ARE AND THE CLOSER THE TIME PERIODS DElNED OBJECTIVES
FOR SINGLE MILESTONES THE EARLIER AND MORE SENSITIVELY A MONITORING
CONTROL SYSTEM IS ABLE TO RESPOND WHEN INTERNAL PROBLEMS APPEAR OR
THE ENVIRONMENT OF THE /-) CHANGES
/PERATIONAL OBJECTIVES SHOULD BE DIRECTLY LINKED TO MARKETING

MEASURES SEE AS AN EXAMPLE lGURE &OR INSTANCE IF AN /-) PLANS
TO INTRODUCE A NEW PRODUCT ONTO THE MARKET IT MAY ACCOMPANY THE
INTRODUCTION WITH SPECIAL INTRODUCTORY PRICES AND OTHER SALES PROMO
TION MEASURES )N THIS CASE THE TIME PERIOD AND THE lNANCIAL REALISA
TION OF THE MARKETING MEASURES SHOULD BE CALCULATED AND THE CONTRI
BUTION TO THE UNDERLYING STRATEGIC OBJECTIVE SHOULD BE FORMULATED

/PERATIONAL
OBJECTIVES
/BJECTIVE -ILESTONES 4IME

PARAMETER PARAMETER
-AXIMISE PROFIT %NLARGE DEGREE OF YEAR

MARGIN UP TO RECOGNITION TO
AT LEAST IN REGION X
IN THE NEXT YEARS
%NLARGE MARKET YEAR
PENETRATION IN
REGION X TO
%NLARGE DEGREE OF YEAR

RECOGNITION TO
IN REGION X
%NLARGE MARKET YEAR

PENETRATION IN
REGION X TO
&IGURE %XAMPLE OF THE DElNITION OF AN OPERATIONAL OBJECTIVE
3TRATEGIES ARE GENERAL DECISIONS ORIENTED TOWARDS THE MEDIUM

DEVELOPING OR LONG TERM 4HEY CAN BE UNDERSTOOD AS PATHS THAT ARE DESIGNED TO
AND DECIDING REACH THE OBJECTIVES AN /-) IS WORKING TOWARDS 4HEY ALSO GIVE AN
ON MARKETING OUTLINE FOR THE IMPLEMENTATION OF APPROPRIATE MARKETING INSTRU
STRATEGIES MENTS 4HEY MUST BE BASED ON THE OVERALL OBJECTIVES OF THE /-) AND
THE CHOSEN STRATEGIC MARKETING OBJECTIVES SEE ALSO CHAPTER 4HEY
ARE THE BINDING ELEMENT BETWEEN THE STRATEGIC AND OPERATIONAL MAR
KETING OBJECTIVES SEE lGURE 4HIS MEANS THEY HAVE A CENTRAL AND
PRE EMINENT POSITION WITHIN THE MARKETING PLANNING OF AN /-)
"UT WHAT DOES A MARKETING STRATEGY MEAN FOR AN /-) )T MEANS

7HAT DOES A ACHIEVING THE BEST POSSIBLE MATCH BETWEEN THE /-)S RESOURCES AND
MARKETING STRENGTHS AND THE OPPORTUNITIES AND THREATS OF THE MARKET ENVIRON
STRATEGY MEAN MENT 4HE CHOSEN MARKETING STRATEGIES SHOULD LEAD THE /-) TO A
UNIQUE AND STABLE POSITION WITHIN THE MARKET

3TART UP PHASE
4HE SELECTION OF A MARKETING STRATEGY IS STRONGLY INmUENCED BY (OW TO SELECT

THE RESULTS OF THE 37/4 ANALYSIS AND IS DERIVED DIRECTLY FROM THE STRA THE APPROPRIATE
TEGIC MARKETING OBJECTIVES 4RADITIONALLY AND IN MOST CASES PLANNING MARKETING
FOR A NEW BUSINESS STARTS WITH THE DElNITION OF STRATEGIC OBJECTIVES STRATEGY
THAT DETERMINE THE FRAMEWORK FOR DEVELOPING A MARKETING STRATEGY
SEE lGURE (OWEVER SMALL ANDOR FAMILY OWNED COMPANIES AND
ALSO MANY /-)S FREQUENTLY START OFF WITH A BRIGHT BUSINESS IDEA
4HIS MEANS THEY HAVE CONSIDERED A STRATEGY BEFORE THEY START TO DElNE
THE OBJECTIVES BEHIND THE STRATEGY &OR INSTANCE A GROUP OF MOUNTAIN
FARMERS CAME UP WITH THE IDEA OF PRODUCING CHEESE ACCORDING TO AN
CIENT CHEESE MAKING RECIPES FROM THEIR REGION )N THIS CASE ONLY THE
SECOND STEP OF THE OVERALL OBJECTIVES AND MARKETING OBJECTIVES WAS
CONSIDERED
/VERALL OBJECTIVES OF AN /-)
3TRATEGIC MARKETING OBJECTIVES
-ARKETING STRATEGY

&IGURE -ARKETING STRATEGIES BETWEEN STRATEGIC AND OPERATIONAL OBJECTIVES
3OURCE &IGURE ADAPTED FROM (!--
'ENERATING STRATEGIES SHOULD BE UNDERTAKEN AS A STEPWISE AND 7HAT INmUENCES

CREATIVE PROCESS WITHIN THE LEADING OR STEERING GROUP OF AN /-) $UE THE SELECTION OF
CONSIDERATION MUST BE GIVEN TO THE FACT THAT EACH STRATEGY CONSISTS OF AN APPROPRIATE
SEVERAL INDIVIDUAL ELEMENTS WHICH MUST BE COMPOSED IN A CONSISTENT STRATEGY
WAY

4HEREFORE THE DEVELOPMENT OF A SUCCESSFUL STRATEGY SHOULD BE CENTRED

AROUND FOUR PRINCIPAL QUESTIONS
7HICH PRODUCTS WILL FOCUS ON WHICH MARKETS 0RODUCT MARKET

FOCUS
(OW DO YOU STIMULATE THE MARKET n BY PRODUCT QUALITY OR PRICE
ADVANTAGES -EANS OF STIMULATION
7HAT ARE THE TARGET GROUPS FOR THE PRODUCTS -ARKET SEGMEN
TATION
7HAT IS THE SPATIAL COVERAGE OF THE /-)S PRODUCTS 3PATIAL
COVERAGE
7HICH PRODUCTS WILL FOCUS ON WHICH MARKETS

THE RIGHT Q -ARKET PENETRATION STRATEGY TO PUSH AN EXISTING PRODUCT MORE
PRODUCTS FOR THE STRONGLY ONTO AN EXISTING MARKET EG BY A STRONG INCREASE IN ITS
RIGHT MARKETS ADVERTISING BUDGET THE /-)S APPLE BRAND WILL GAIN A GREATER
DEGREE OF RECOGNITION AND A BETTER IMAGE WITH REGARD TO ITS
HEALTH BENElTS
Q -ARKET DEVELOPMENT STRATEGY TO INTRODUCE AN EXISTING PRODUCT
ONTO A NEW MARKET EG EXPANDING THE SALE OF A CHEESE SOLD ONLY
ON ITS OWN REGIONAL MARKET INTO THE MARKET OF A NEIGHBOURING
REGION
Q 0RODUCT DEVELOPMENT STRATEGY TO DEVELOP A NEW PRODUCT FOR
THE EXISTING MARKET EG TO DEVELOP AN ORGANIC BEEF BRAND
WHICH SUBSTITUTES THE EXISTING hNO NAMEv ORGANIC BEEF SCHEME
OR TO PROVIDE ADDITIONAL CUSTOMER SERVICES
Q $IVERSIlCATION STRATEGY TO DEVELOP NEW PRODUCTS FOR NEW
MARKETS EG AN /-) WHICH DELIVERED ORGANIC VEGETABLES TO THE
WHOLESALER AND NOW STARTS TO DEVELOP AN PROCESSED VEGETABLE
LINE IN ORDER TO SELL ITS PRODUCTS TO A CATERING COMPANY
(OW TO STIMULATE THE MARKET BY PRODUCT QUALITY OR QUANTITY

QUANTITY OR Q 1UALITY STRATEGY FOCUSES ON THE PREMIUM PRODUCT SEGMENT
QUALITY WITH HIGH QUALITY PRODUCT STANDARDS IN ORDER TO BE ABLE TO EARN
STRATEGIES HIGH PRODUCT PRICES EG AN /-) PLANS TO PRODUCE HIGH QUALITY
PASTA UNDER ITS OWN BRAND LABEL
Q 0RICE QUANTITY STRATEGY TO BUILD UP HIGH PRODUCT VOLUME
CAPACITIES IN ORDER TO GET HIGHER PRICES FROM WHOLESALERS OR
PROCESSORS EG AN /-) OF VEGETABLE PRODUCERS WHICH BUNDLES

3TART UP PHASE
4HE ANSWERS TO THE FOLLOWING QUESTIONS FACILITATE THE SELECTION OF

THE RIGHT PRODUCT MARKET STRATEGY
Q $OES THE /-) HAVE MARKET FAMILIARITY NEW WELL KNOWN OR
RELATED MARKET
Q 7HAT IS THE ATTITUDE OF THE /-) TO ITS POTENTIALLY MOST RELEVANT
COMPETITORS FRIENDLY AGGRESSIVE
Q 7HAT IS THE ATTITUDE OF THE /-) CONCERNING PRODUCT AND TECH
NOLOGY INNOVATIONS
Q )S THE /-) ABLE TO USE SMALL OR LARGE MARKETING BUDGETS
Q )S THE TARGET MARKET ALREADY MATURED OR NOT WITH REGARD TO THE
/-)S PLANNED PRODUCTS AND SERVICES
@,UOMUBOTNIA &INLAND
0RICE QUANTITY STRATEGY TO MAINTAIN A STRONG MARKET POSITION IN
THE VEGETABLE MARKET
&ARMERS BELONGING TO THIS VEGETABLE SELLING COMPANY PRODUCE A RE
MARKABLE SHARE OF CARROTS POTATOES AND ONIONS IN &INNISH ORGANIC
MARKETS 4HIS COMPANY TRIES TO CONCENTRATE ON THESE VOLUME PRODUCTS
AND THEREBY SECURE THE BASE OF THE BUSINESS 4HEY PROlT FROM ECONO
MIES OF SCALE BECAUSE HANDLING VOLUME PRODUCTS IS MORE EFFECTIVE
THAN HANDLING OTHER PRODUCTS IN SMALLER QUANTITIES 7HOLESALERS ARE
CONTENT TO HAVE MORE FROM ONE PLACE 4HE &INNISH TRADE SYSTEM IS
HIGHLY CENTRALISED AND CARRIAGE DISTANCES ARE LONG ! STRATEGY BASED
ON HIGH VOLUME PRODUCTS AND HIGH MARKET SHARES ALSO SERVES THE AIM
OF HAVING A BETTER FARMER PRICE PREMIUM FOR ORGANIC PRODUCTS .EGO
TIATING POWER IS BETTER AND THE COMPANY CAN BE A PRICE MAKER RATHER
THAN A PRICE TAKER
4HEY ALSO SELL SOME SMALLER QUANTITIES OF MANY DIFFERENT VEGETABLES
TO THE WHOLESALERS 4HESE PRODUCTS ARE MARGINAL IN TERMS OF VOLUME
AND ARE AVAILABLE ONLY SEASONALLY 7HEN VOLUME PRODUCTS ARE THE WAY
TO ENTER THE RETAILER CHAIN THESE SPECIAL PRODUCTS ARE SEEN MORE AS
SERVICE AND A WAY TO DEVELOP THE BUSINESS RELATIONSHIP
3OURCE 5NIVERSITY OF (ELSINKI -IKKELI )NSTITUTE FOR 2URAL 2ESEARCH
AND 4RAINING &INLAND


THE RIGHT STRATEGY WITH REGARD TO THE MARKET STIMULATION
Q 7HAT ARE THE PRIMARY GOALS OF THE /-) TO MAXIMISE TURNO
VER RETURNS MARKET SHARE OR TO REALISE HIGHER PRODUCT PRICES
THROUGH HIGHER QUALITY AND SALES SERVICES OR BY EXCLUSIVITY
Q 7HAT ARE THE PRIMARY AREAS OF PERFORMANCE THAT THE /-) WANTS
TO ACHIEVE PREMIUM QUALITY PRICE ADVANTAGES PROXIMITY TO
CUSTOMER x
TOGETHER THE SUPPLY OF ITS MEMBERS AS ITS MAIN FUNCTION IN OR

DER TO GET MORE MARKET POWER
7HAT ARE THE TARGET GROUPS FOR THE PRODUCTS

FOCUS TARGET Q -ASS MARKET STRATEGY NO MARKET SEGMENTATION IS CARRIED OUT
GROUPS n ALL CUSTOMERS OR CONSUMERS ARE POTENTIAL CLIENTS EG AN /-)
WHICH COLLECTS MILK NATIONWIDE IN ORDER TO GET MORE MARKET
POWER
Q 3EGMENTATION STRATEGY THE /-)S PRODUCTS FOCUS ON ONE OR
A FEW PARTICULAR CUSTOMERS OR CONSUMER GROUPS EG AN /-)
WHICH PRODUCES AND PROCESSES A TRADITIONAL REGIONAL PORK SPE
CIES INTO HIGH QUALITY SAUSAGES FOCUSES ITS PRODUCTS ESPECIALLY
ON TOURISTS AND CONSUMERS WHO PREFER DELICATESSEN FOOD
7HAT IS THE SPATIAL COVERAGE OF THE /-)S PRODUCTS

Q ,OCAL 2EGIONAL .ATIONAL )NTERNATIONAL MARKET STRATEGY

THE RIGHT STRATEGY WITH REGARD TO THE MARKET SEGMENTATION
Q (OW SHOULD THE MARKET BE DEVELOPED DIFFERENTIATED OR UNDIF
FERENTIATED
Q $O SPECIlC CUSTOMER OR CONSUMER GROUPS EXIST FOR THE /-)S
PRODUCTS
Q 7HICH MARKET SEGMENTSCUSTOMER GROUPS ARE FOCUSED UPON
Q 3HOULD A NICHE OR MARKET LEADER STRATEGY BE FOLLOWED

3TART UP PHASE
!REAS OF MARKETING STRATEGIES 3TRATEGIC OPTIONS
0RODUCT MARKET FOCUS -ARKET -ARKET 0RODUCT $IVERSIFICATION

PENETRATION DEVELOPMENT DEVELOPMENT STRATEGY
STRATEGY STRATEGY STRATEGY
7AY OF STIMULATION 0REFERENCE 0RICE n

STRATEGY QUANTITY
STRATEGY
-ARKET SEGMENTATION -ASS -ARKET

MARKET SEGMENTATION
STRATEGY STRATEGY
3PATIAL COVERAGE ,OCAL AREA 2EGIONAL AREA .ATIONAL AREA )NTERNATIONAL AREA
STRATEGY STRATEGY STRATEGY STRATEGY
4YPICAL /-) 4YPICAL /-)

STRATEGY PATH STRATEGY PATH
%XAMPLE %XAMPLE
&IGURE -ARKETING STRATEGY OPTIONS AND TYPICAL STRATEGY COMPOSITION EXAMPLES FOR
%UROPEAN /-)S 3OURCE &IGURE ADAPTED FROM "ECKER
%XAMPLE !N /-) PRODUCES DIFFERENT ORGANIC CHEESE VARIETIES WITH

TYPICAL REGIONAL HERB INGREDIENTS 4HE /-) AIMS TO PLACE THE CHEESE
IN THE REGIONAL MARKET AT THE PREMIUM LEVEL 4HEREFORE IT FOLLOWS A
PREFERENCE STRATEGY THAT FOCUSES ON THE SEGMENT OF TOURISTS AND RE
GIONAL CONSUMERS WHO PREFER DELICATESSEN FOOD
%XAMPLE !N /-) WHERE MILK PRODUCERS NATIONWIDE CO OPERATE
HORIZONTALLY AIMS TO ENLARGE ITS MARKET POWER AND MARKET TRANSPAR
ENCY BY BUNDLING TOGETHER LARGE PRODUCT VOLUMES AND STEERING PRICE
NEGOTIATIONS BETWEEN REGIONAL SUB GROUPS AND ALL RELEVANT NATIONAL
DAIRIES 4HE /-) FOLLOWS A MARKET PENETRATION STRATEGY DOES NOT DIF
FERENTIATE BETWEEN MARKET SEGMENTS AND FOLLOWS A PRICE QUANTITY
STRATEGY


SPATIAL COVERAGE THE RIGHT STRATEGY WITH REGARD TO THE SPATIAL COVERAGE
Q 7HAT IS THE DEMAND POTENTIAL FOR THE /-)S PRODUCTS IN ITS OWN
REGIONNATION
Q )S THE DOMESTIC REGION ALSO WELL KNOWN OUTSIDE THE REGION
Q 'ENERALLY SPEAKING WHAT IMAGE DOES THE DOMESTIC REGION AND
ITS PRODUCE HAVE BOTH INSIDE AND OUTSIDE THE REGION FROM A
CONSUMERS POINT OF VIEW
Q 7HAT PRODUCT VOLUME WILL THE /-) BE ABLE TO SELL IN THE ME
DIUM TERM
Q )S PERSONAL CONTACT IMPORTANT TO CONSUMERS OR NOT
7AYS OF CO OPERATING
!PART FROM THE AREAS OF STRATEGY ALREADY DISCUSSED DElNING THE TYPE
OF CO OPERATION PLAYS A CRUCIAL ROLE IN PLANNING THE MARKETING OF AN
/-)
!S DESCRIBED IN #HAPTER THERE IS A DISTINCTION BETWEEN
RIGHT WAY OF HORIZONTAL AND VERTICAL FORMS OF CO OPERATION )N GENERAL THE BIGGER
CO OPERATION A VERTICAL CHAIN OF CO OPERATION PARTNERS IS THE LESS THE /-)S CORE
PRODUCER GROUP IS ABLE TO STEER THE MARKETING PROCESS AND VICE VERSA
/N THE OTHER HAND CO OPERATION PARTNERS IN THE PROCESSING AND RETAIL
SECTOR CAN ASSIST WITH FAST AND EFFECTIVE MARKET INTRODUCTION OR WITH
THE DEVELOPMENT AND ADVERTISING OF BRANDS
-OST /-)S AT THE VERY LEAST USE FORMS OF HORIZONTAL CO OP
ERATION WITH PRODUCERS 4HE QUESTION HERE IS WHAT IS THE OPTIMAL
NUMBER AND STRUCTURE OF CO OPERATION PARTNERS 4HE MORE PARTNERS
4HE /-) @,ANDBRUGSLAUGET IN $ENMARK

WHICH PROVIDE BOX SCHEME SYSTEMS
STARTED WITH THE VISION TO GIVE CONSU
MERS THE POSSIBILITY TO LOOK BEHIND THE
PRODUCTION PROCESS 0HOTO 4 .IELSEN

3TART UP PHASE
@,ANDBRUGSLAUGET $ENMARK
#ONSUMER PRODUCER CO OPERATION n FROM VISION TO REALISATION
4HE /-) WAS LAUNCHED ON THE BASIS OF A VISION FROM A SCENARIO
WORKSHOP WITH PARTICIPATION OF CONSUMERS FARMERS AND ACADEMIC
RESEARCHERS
4HE REALISATION OF THE IDEA STARTED WITH A FEW PERSONS WORKING
HARD TO FORMULATE THE VISIONS AND THEN TO lND A FARM SUITABLE FOR THE
PURPOSE 4HE IDEA WAS THAT FARMERS SHOULD BE ENGAGED IN THE
PROJECT AND BE EMPLOYED TO PRODUCE DIFFERENT PRODUCTS
4HE INITIATORS SUCCEEDED IN lNDING A FARMER ON A FARM SOUTH OF #O
PENHAGEN WHO WAS INTERESTED IN THE PROJECT AND WHO WANTED TO SELL
HIS FARM AND BE AN EMPLOYEE 4HE SITUATION OF THE FARM CLOSE TO #O
PENHAGEN WHICH IS WHERE THE MOST CONSUMERS LIVE ESPECIALLY THOSE
WHO BUY ORGANIC WAS QUITE IMPORTANT IN ORDER TO BE ABLE TO FULlL ONE
OF THE VISIONS n TO GIVE CONSUMERS THE POSSIBILITY OF GOING TO THE FARM
TO SEE IT OR LEND A HAND ON WORKING WEEKENDS ETC
)N A SHORT TIME THEY HAD CONSUMERS COMMITTED TO THE PROJECT
PAYING SHARES OF MINIMUM f EACH 4HEY EXPERIENCED THAT IT WAS
QUITE HARD TO lND FARMERS WHO WERE INTERESTED IN THIS KIND OF PRO
DUCTION WHILE NOT OWNING THEIR FARM !ND THEY ALSO REALISED THAT THEY
WERE TOO AMBITIOUS IN THEIR VARIETY OF VEGETABLES ALTHOUGH mEXIBILITY
HAD BEEN ONE OF THEIR VISIONS THIS WAS A TOO HEAVY WORKLOAD 4HIS
MAY HOWEVER HAVE BEEN A CONSEQUENCE OF BAD MANAGEMENT IN THE
lRST YEAR SINCE THEY HAD SOME PROBLEMS CO ORDINATING PRODUCTION
AND SALES
4ODAY THE /-) SELLS PRODUCTS FROM THEIR OWN PRODUCTION AND PROD
UCTS FROM OTHER PRODUCERS THROUGH BOX SCHEMES 4HEY SELL THEIR PRO
DUCE PARTLY TO THE CONSUMERS WHO OWN A SHARE NOT ALL THE CONSUM
ERS WHO PAID A SHARE ARE INTERESTED IN HAVING THE PRODUCTS AND PARTLY
TO OTHER CONSUMERS 4HE COMMITMENT OF THE CONSUMER SHAREHOLDERS
IS GROWING
3OURCE 4ECHNICAL 5NIVERSITY OF $ENMARK ,YNGBY $ENMARK
INVOLVED THE BIGGER THE PRODUCT VOLUMES THAT RESULT MARKET POWER
WILL THEREFORE BE STRONGER BUT THERE WILL ALSO BE LESS mEXIBILITY PROC
ESSES OF DECISION MAKING ON STRATEGIC QUESTIONS WILL BE SLOWER AND
MARKET ORIENTATION WILL TEND TO BE MORE CONSERVATIVE

@!GRI"IO 5NION &RANCE

5NION BETWEEN ORGANIC AND CONVENTIONAL CO OPERATIVES
4HE CO OPERATIVE !GRI"IO 5NION IN THE SOUTH WEST OF &RANCE DECIDED
TO CREATE A UNION OF CO OPERATIVES WITH TWO CONVENTIONAL CO OPERA
TIVES ACTIVE IN THE CEREAL AND OILSEED SECTOR /NE OF THE !GRI"IO 5NION
MANAGERS SKILLS WAS TO BE ABLE TO GET OUT OF THE ORGANIC @MILIEU EG
BY MAKING A COMMERCIAL AGREEMENT WITH AN IMPORTANT ACTOR ON THE
DIETETICS MARKET AND SO TO REACH BETTER @NON ORGANIC CLIENTS
4HE STRATEGIC CHOICE WAS TO GO FOR INCREASED QUANTITIES OF BASIC PRO
DUCTION RATHER THAN FOR ADDED VALUE BY PROCESSING AND PACKAGING THE
PRODUCTS FOR CONSUMERS CONTRARY TO WHAT OTHER lRMS IN THE SAME
SECTOR HAVE DONE !GRI"IO 5NION SPECIALISED IN ORGANICS HAS
PRODUCERS AND A REPORTED TURNOVER OF f MILLION IN WITH AN
ANNUAL GROWTH RATE OF
.EVERTHELESS THIS UNION WITH THE CONVENTIONAL lRMS AND THE lNANCIAL
ARRANGEMENTS HAVE BEEN HIGHLY CRITICISED IN THE CURRENT UNION THE
MANAGER BROUGHT HIS BUSINESS AS CAPITAL 3TRATEGIC DEPENDENCY CAN
NOT BE DENIED NEVERTHELESS THE CO OPERATIVE HAS MANAGED TO GROW
THANKS TO COMMERCIAL LINKS TO THE CONVENTIONAL CO OPERATIVES CLIENTS
5LTIMATELY THE DEVELOPMENT OF A STRONG AND DYNAMIC ECONOMIC ACTIV
ITY WAS IN THE REGIONS FAVOUR 3OURCE ).2! ,E -ANS &RANCE

THE RIGHT STRATEGY FOR CO OPERATION
Q (OW mEXIBLE IS THE MARKET AND WILL THE /-) BE ABLE TO REACT TO
CHANGED PARAMETERS IN THE MICRO AND MACRO ENVIRONMENT
Q 7HAT ARE THE ATTITUDES OF THE /-) MEMBERS AS REGARDS CO OP
ERATION AND SOLIDARITY
Q 7HAT ARE THE LABOUR AND lNANCIAL mEXIBILITIES AND RESTRICTIONS OF
THE /-) IS THERE ANY PUBLIC lNANCIAL SUPPORT
Q 7HAT IS THE /-)S OWN COMPETENCE WITH REGARD TO ALL RELEVANT
MARKETING QUESTIONS

3TART UP PHASE
-ANY /-)S BEGIN WITH THE INTENTION OF MEMBERS TO OBTAIN MOST /-)S ARE
HIGHER PRICES FOR THEIR PRODUCTS (OWEVER CONSIDERATION SHOULD BE NICHE PLAYERS
GIVEN TO THE FACT THAT /-)S THAT ARE GENERALLY ABLE TO EARN HIGHER
PRODUCT PRICES THAN THE REGIONAL AVERAGE ARE THOSE THAT PURSUE AN
EXCLUSIVE PREFERENCE STRATEGY !N EXCLUSIVE STRATEGY HAS A GREAT MANY
IMPLICATIONS IN TERMS OF PLANNING MARKETING INSTRUMENTS AS WELL AS
ADDITIONAL COSTS -ERELY LABELLING A PRODUCT AS REGIONALLY PRODUCED IS
NOT SUFlCIENT TO INDUCE CONSUMERS TO PAY MORE
)T IS ALSO IMPORTANT ALWAYS TO CONSIDER AN /-)S MARKET POSI
TION AND MARKET SIZE WHEN DElNING STRATEGIES ! POTENTIAL MARKET
LEADER NEEDS DIFFERENT STRATEGIES FOR SUCCESSFUL OPERATION THAN THOSE
OF A NICHE PLAYER "ECAUSE MOST /-)S ARE NICHE PLAYERS RATHER THAN
GLOBAL PLAYERS SOME SPECIlC ISSUES CONCERNING STRATEGIES FOR NICHE
PLAYERS ARE DESCRIBED BELOW
.ICHE PLAYERS ARE SMALLER SUPPLIERS WHO CONCENTRATE ONLY ON
CERTAIN PRODUCT MARKETS 4HEY SUCCESSFULLY ESTABLISH THEMSELVES IN A
NICHE THAT IS FORGOTTEN OR NEGLECTED BY BIGGER SUPPLIERS WHO ARE UN
ABLE TO lLL THEM EFlCIENTLY
4HE SUCCESS OF NICHE MARKET STRATEGIES IS BASED MAINLY ON
GREATER SPECIALISATION AND FOCUS ON SPECIlC PRODUCTS ANDOR CUSTOM
ER GROUPS ! NICHE CAN BE DElNED IN MANY DIFFERENT WAYS EG USING
GEOGRAPHICAL CUSTOMER PRODUCT PRICE OR SALES CHANNEL CRITERIA
/PERATING IN SEVERAL NICHES AT THE SAME TIME RATHER THAN EXCLU
SIVELY IN ONE IS RECOMMENDED IN ORDER TO MINIMISE MARKET RISKS AND
DEPENDENCIES INVOLVED IN THE CASE OF ONE PRODUCT MARKET CHANNEL OR
PRODUCT LIFE CYCLE
.ICHE PLAYERS ARE OFTEN VERY SUCCESSFUL BECAUSE THEY KNOW THEIR
SMALLER CUSTOMER GROUP MUCH BETTER THAN THE BIG PLAYERS DO 4HEY
@/TTO -ARZO )TALY

4YPICAL LOCAL PRODUCTS FOR THE REGIONAL HOME MARKET
/TTO -ARZO SPECIALISED IN LOCAL DAIRY PRODUCTS YOGURT AND TYPICAL )TAL
IAN CHEESES AND WINES
)T HAS GOOD LINKS WITH THE TERRITORY RUNS AN AGROTOURISM AND FARM SHOP
AND WORKS A GREAT DEAL WITH SCHOOLS OPEN DAYS )TS MAIN OUTLETS ARE
WHOLESALERS WORKING WITH ORGANIC SPECIALISED SHOPS IN THE HOME
MARKET 3OURCE 5NIVERSIT¸ 0OLITECNICA DELLE -ARCHE !NCONA )TALY

ARE ALSO ABLE TO REACT QUICKLY AND APPROPRIATELY TO SPECIlC CUSTOMER

NEEDS !NOTHER ADVANTAGE IS THAT MOST OF THE TIME THERE ARE FEWER
COMPETITORS THAN IN A MASS MARKET .ICHE PRODUCTS THEREFORE HAVE
HIGHER VALUE FOR MANY CUSTOMERS
#OMMUNICATION OF MARKETING STRATEGIES

)T IS NOT SUFlCIENT TO DElNE APPROPRIATE STRATEGIES EXCLUSIVELY AMONG
AN /-)S STEERING GROUP "ECAUSE STRATEGIES ARE NOT AN END IN THEM
SELVES THEY ALSO MUST BE COMMUNICATED TO RELEVANT PARTNERS SUP
PORTERS AND CUSTOMERS )T IS IMPORTANT HOWEVER THAT NOT ALL STRATEGIC
OPTIONS DEVELOPED BY AN /-) MAY BE RELEVANT TO MARKET PARTNERS
&OR EXAMPLE STRATEGIES AIMED AT EARNING MAXIMUM MONEY ARE OF
COURSE RELEVANT FOR /-) MEMBERS BUT IT IS NOT APPROPRIATE TO COM
MUNICATE THIS STRATEGY TO CUSTOMERS #ERTAIN STRATEGIES SHOULD THERE
FORE BE FORMULATED IN A MANNER THAT CAN EASILY BE COMMUNICATED TO
CUSTOMERS BUT THAT ALSO IMPROVES HOW /-) MEMBERS IDENTIFY WITH
THEIR INITIATIVE
3UCH STRATEGIES FOR EXAMPLE MIGHT INCLUDE TO PROVIDE REGIONAL
SPECIALITIES TO BETTER CO ORDINATE THE SUPPLY OF A CERTAIN PRODUCT BY
CO OPERATION BASED MARKETING TO PROVIDE THE BEST QUALITY CHEESE IN
A CERTAIN REGION TO PROVIDE THE MOST EXCITING OR DIVERSIlED PRODUCT
RANGE OR TO HAVE THE BEST DELIVERY SERVICE FOR RESTAURANTS AND CAFETE
RIAS INSIDE A REGION
-ARKETING MICRO STRATEGIES NEED TO BE ADAPTED REGULARLY

4HE MICRO AND MACRO ENVIRONMENTS OF /-)S DEVELOP DYNAMICALLY
2ULES CONSUMERS AND SOME OF AN /-)S MARKETING OBJECTIVES MIGHT
CHANGE OVER TIME BECAUSE THE STRUCTURE OF THE /-) HAS CHANGED OR
THERE IS A PUSH FROM SOME /-) MEMBERS TO ENTER NEW MARKETS OR
DEVELOP NEW PRODUCTS #HANGES ALSO OFTEN OCCUR WHEN MARKETING
CONTROLS REVEAL THAT OBJECTIVES HAVE NOT BEEN ACHIEVED WITHIN A DE
lNED TIME FRAME
!LL THESE POSSIBILITIES CAN OCCUR AND FORCE AN /-) TO RETHINK THE
ORIGINAL MARKETING OBJECTIVES AND MARKETING STRATEGIES DElNED AT THE
OUTSET )N MOST CASES IT IS NECESSARY TO ADAPT THEM SEE lGURE
4HE LAST CHECK FOR DEVELOPED MARKETING STRATEGIES

4HE FOLLOWING LIST SHOULD FACILITATE A lNAL CHECK WHEN PLANNING OF
STRATEGIES HAS BEEN COMPLETED )T IS USEFUL TO CHECK THESE POINTS IN

3TART UP PHASE
#HECK LIST 9
)S IT CLEAR WHICH MARKET SEGMENT WILL BE DEVELOPED WITH WHICH
PRODUCTS AND WITH WHICH STRATEGY
)S THE MARKETING STRATEGY OR STRATEGIES COHERENT IN TERMS OF THE
/-)S OVERALL OBJECTIVES AND MARKETING OBJECTIVES
7ERE THE MAIN RESULTS OF THE 37/4 ANALYSIS FOR PLANNING THE MAR
KETING STRATEGY TAKEN INTO ACCOUNT
(AVE THE OPERATIVE MARKETING OBJECTIVES BEEN CLARIlED TURNOVER
RETURNS MARKET SHARES AND ADAPTED TO THE STRATEGIES
)S THE STRATEGY SUFlCIENTLY CUSTOMER TARGET GROUP ORIENTED
!RE THE PRIMARY PERFORMANCES THE /-) WANTS TO ACHIEVE WELL
DElNED PREMIUM QUALITY PRICE ADVANTAGES PROXIMITY TO CUS
TOMER x
$OES THE MARKETING STRATEGY ALLOW SHORT TERM BENElTS FOR MEM
BERS
)S THE CONCEPT OF CO OPERATION CLEAR AND ABLE TO BE IMPLEMENTED
BY ALL /-) MEMBERS
(AVE THE LABOUR AND lNANCIAL RESOURCES AND RESTRICTIONS OF AN
/-) BEEN ADEQUATELY TAKEN INTO ACCOUNT
)S THE MARKETING STRATEGY UNDERSTANDABLE FOR EXTERNAL PEOPLE EG
lNANCIAL PARTNERS POTENTIAL CO OPERATION PARTNERS AS WELL
&IGURE #HECKLIST FOR THE DYNAMIC PROCESS OF STRATEGIC MARKETING PLANNING
ORDER TO IDENTIFY GAPS AND INCONSISTENT POINTS IN THE STRATEGIC MARKET

ING PLANNING
$ETERMINING MARKETING INSTRUMENTS IN A MARKETING MIX

)N ORDER TO IMPLEMENT STRATEGIES THERE IS A NEED FOR MORE DETAILED
SPECIlCATION AND PLANNING OF CONCRETE MEASURES 0LANNED MEASURES
ARE DETERMINED BY ANALYSING AN /-)S POTENTIAL AND CONSTRAINTS ITS
MARKET POSITION THE STRATEGIES OF ITS MOST RELEVANT COMPETITORS AND
THE MACRO ENVIRONMENT )N SUM THE TASK OF PLANNING MARKETING IN
STRUMENTS NEEDS TO DElNE AN OPTIMAL MARKETING MIX WHICH PROMISES
THE REALISATION OF MOST OF THE /-)S OBJECTIVES AND STRATEGIES
4HE MARKETING BUDGET AND ITS RELATIONSHIP TO /-) OBJECTIVES

4HE MARKETING PLAN FOR AN /-) MUST BE STRONGLY BASED ON THE
AVAILABLE BUDGET 4HE PROCESS OF BUDGETING REQUIRES PRIOR PLANNING

4HE 'ERMAN RETAILER

@&ENEBERG DEVELOPED
WITH THE ORGANIC BRAND
h6ON HIERv @FROM THE
OWN REGION A CLEAR
STRATEGY TO FOCUS THE
ORGANIC PRODUCT OFFER
ON REGIONAL PRODUCTS
0HOTO ' (EMPmING
OF OPERATIONAL OBJECTIVES PLANNED PERFORMANCES FOR PRODUCTION

AND MARKETING AS WELL AS PLANNING TO DElNE PERSONAL RESPONSIBILI
TIES WITHIN AN /-) 0LANNED PERFORMANCES CAN BE TURNOVER MARKET
SHARE ECONOMIC RETURNS OR GROSS MARGIN 4HE BUDGET ALLOCATION MUST
TAKE INTO ACCOUNT THE IMPLICATIONS OF DIFFERENT OPERATIONAL OBJECTIVES
)T SHOULD ALSO INCLUDE THE COSTS OF AREAS SUCH AS MARKET RESEARCH THAT
ARE NOT DIRECTLY LINKED WITH ANY PLANNED PERFORMANCE
)N PRACTICE THE PLANNED BUDGET FOR MARKETING ACTIVITIES IS GEN
ERALLY LINKED TO EXPECTED SALES A PERCENTAGE OF TURNOVER )T IS ALSO
MARKETING POSSIBLE TO USE BUSINESS STANDARDS USUALLY APPLIED BY OTHER lRMS IN
BUDGETS HAVE TO THE SAME SECTOR +EEP IN MIND THAT THE lRST APPROACH A RIGID @PERCEN
BE LINKED TO THE TAGE OF SALES COULD CAUSE PROBLEMS IN A SITUATION OF LOWER SALES )N THIS
EXPECTED SALES CASE MARKETING POWER SHOULD BE STRENGTHENED BY AN ABOVE AVERAGE

3TART UP PHASE
MARKETING PUSH ANTI CYCLICAL REACTION 4HEREFORE AN /-) OBJECTIVE

ORIENTED BUDGET SHOULD BE PREFERRED OVER SALES RELATED BUDGETING
4HE MARKETING MIX

! TYPICAL MARKETING MIX CONSISTS OF THE FOLLOWING FACTORS DISTRIBUTION
POLICY PROMOTION POLICY PRODUCT POLICY AND PRICE POLICY SEE lGURE
"EHIND EACH FACTOR ARE MANY INDIVIDUAL MARKETING INSTRUMENTS
AND QUESTIONS ABOUT HOW TO USE THESE MARKETING INSTRUMENTS IN AN
APPROPRIATE WAY INCLUDING HOW TO COMBINE THEM MOST EFFECTIVELY )T
IS ESSENTIAL THAT THE CHOSEN MARKETING INSTRUMENTS ARE ADJUSTED TO THE
OPERATIONAL MARKETING OBJECTIVES )T IS ALSO ESSENTIAL TO EMPHASISE THAT
THE CHOSEN MARKETING MIX SHOULD NOT BE STATICALLY lXED BUT MUST
ADAPT TO THE CHANGING OPERATIONAL OBJECTIVES
$ISTRIBUTION POLICY
/NE OF THE lRST AND MOST IMPORTANT STRATEGIC DECISIONS WHEN A START
ING AN /-) IS TO PLAN THE RIGHT STRATEGY FOR DISTRIBUTING PRODUCTS
4HIS DECISION DEPENDS TO A LARGE EXTENT ON WHETHER THE /-) HAS CHO
SEN A QUALITYPREMIUM PRODUCT STRATEGY OR A PRICEQUANTITY STRATEGY
-ARKETING MIX
$ISTRIBUTION POLICY 0ROMOTION POLICY
0RODUCT POLICY 0RICE POLICY

&IGURE 4HE FOUR ELEMENTS OF THE MARKETING MIX
3OURCE &IGURE ADAPTED FROM (!--

$ISTRIBUTION IN THIS CONTEXT INCLUDES THE ASPECTS OF TRANSPOR

7HAT DOES TATION STORAGE SORTING PACKAGING AND STOCK CONTROL OF PHYSICAL
DISTRIBUTION PRODUCTS 4HE MEANING OF DECISION MAKING IN THE DISTRIBUTION POLICY
MEAN AREA HOWEVER HAS IMPLICATIONS THAT GO WELL BEYOND THE lNANCING OF
STORAGE BUILDINGS OR LOGISTIC CHAINS )T ALSO SETS THE FRAMEWORK FOR
MANAGING ALL SELLING AND MARKETING ACTIVITIES OR BINDING CUSTOMERS
BY SERVICES ACTIVITIES !LL DISTRIBUTION DECISIONS INTERACT STRONGLY WITH
OTHER ASPECTS OF THE MARKETING MIX 7HERE AND HOW A PRODUCT IS DIS
TRIBUTED IS RELATED TO AND MAY EVEN BE DICTATED BY AN /-)S GIVEN
BUSINESS OBJECTIVES ITS CHOSEN STRATEGY AND THE AVAILABILITY OF HUMAN
AND CAPITAL RESOURCES
#HOOSING THE @WRONG DISTRIBUTION CHANNEL IN THE lRST INSTANCE

IMPLICATION OF AND CONSEQUENTLY HAVING TO CHANGE IT USUALLY RESULTS IN SUBSTANTIAL
DISTRIBUTION lNANCIAL LOSSES #AREFUL MARKET CHANNEL EVALUATION IS THEREFORE ESSEN
POLICY TIAL )T TAKES A GREAT DEAL OF TIME AND MONEY TO BUILD UP CONTACTS WITH
APPROPRIATE DISTRIBUTION CHANNELS TO CONVINCE THEM OF A CONCEPT AND
PRODUCTS AND THEN TO PREPARE THE /-) TO FULlL THE REQUIREMENTS OF
THE FUTURE MARKET PARTNERS
4O SELECT A MARKET CHANNEL FREQUENT CONTACT AND DISCUSSIONS
WITH POSSIBLE PARTNERS ARE IMPORTANT 4HIS ENHANCES THE TRANSPA
RENCY OF POSSIBLE PARTNERS !S A RESULT AN OPPORTUNITYTHREAT ANALYSIS
OF EACH POSSIBLE PARTNERDISTRIBUTION POLICY MIGHT BE USEFUL
DISTRIBUTION 'ENERALLY A DISTINCTION IS MADE BETWEEN THE DIRECT AND INDIRECT

CHANNELS WITH PHYSICAL DISTRIBUTION OF ORGANIC PRODUCTS TO CONSUMERS SEE lGURE
HIGH AND LOW 4HE LONGER THE SUPPLY CHAIN THE LOWER THE CHANCES THAT AN /-)
INVESTMENT CAN STEER THE MARKET THROUGH ITS OWN MARKETING MEASURES AND CON
REQUIREMENTS VINCE CONSUMERS THROUGH ITS OWN PROMOTION ACTIVITIES
$ECIDING ON THE PREFERRED DISTRIBUTION CHANNEL MUST BE BASED

STRATEGIC OBJEC STRICTLY ON THE STRATEGIC OBJECTIVES 3ALES CHANNELS THAT OPERATE VIA
TIVES SHOULD AGENTS WHOLESALERS OR PROCESSORS CLEARLY REQUIRE LESS MARKETING IN
DETERMINE SELEC VOLVEMENT AND INVESTMENT THAN DISTRIBUTION VIA SELLING DIRECTLY TO
TION OF DISTRIBU CONSUMERS RETAILERS OR THE FOOD SERVICECATERING SECTOR 4HERE IS ALSO
TION CHANNELS A HIGHER RISK INVOLVED IN HAVING ONLY ONE MAJOR DISTRIBUTION CHANNEL
)F FOR EXAMPLE THE ONLY PROCESSOR OR MAJOR MARKET RETAILER WITHIN
THE /-)S REGION OPTS OUT OF CO OPERATING IN THE MARKET THE /-)
MUST CARRY THE MARKET RISK BY ITSELF

3TART UP PHASE
0RODUCER
!GENT
0ROCESSOR 0ROCESSOR
7HOLESALER 7HOLESALER 7HOLESALER
2ETAILER 2ETAILER 2ETAILER 2ETAILER
#ONSUMER
&IGURE $ISTRIBUTION OPTIONS FROM /-) PRODUCERS TO CONSUMERS
3OURCE (!).%3
'ENERALLY SPEAKING THE SHORTER THE CHAIN BETWEEN /-) PRO

DUCTS AND THE lNAL CONSUMER THE LESS DEPENDENT THE /-) WILL BE
ON THE SUCCESS OF OTHER MARKET ACTORS $IRECT SELLING ACTIVITIES TO THE
RETAIL OR CATERING INDUSTRIES ALSO REQUIRES AN /-) TO UNDERTAKE AD
DITIONAL PROCESSING AND MARKETING ACTIVITIES &OR EXAMPLE RETAILERS
OFTEN EXPECT PRODUCTS TO HAVE BEEN PACKED AND LABELLED READY FOR
SALE #AFETERIAS OR FOOD CANTEENS ARE USED TO PRODUCTS THAT ARE READY
TO COOK IE POTATOES OR CARROTS THAT HAVE BEEN CLEANED PEELED ARE
UNIFORM IN SIZE ETC
!PART FROM THE LENGTH OF THE SUPPLY CHAIN THE CHOSEN DISTRIBU
TION POLICY ALSO COVERS
Q 3PATIAL ASPECTS TO SELL LOCALLY REGIONALLY NATIONALLY OR INTERNA

TIONALLY
Q !VAILABILITY ASPECTS TO PROVIDE PRODUCTS EXCLUSIVELY TO ONE PAR
TICULAR COMPANY OR SELECTIVELY FOR ONE PARTICULAR DISTRIBUTION
CHANNEL SUCH AS NATURAL FOOD SHOPS OR TO PROVIDE ACCESS FOR THE
PRODUCTS TO ALL CHANNELS

3PATIAL DISTRIBUTION AREAS SHOULD BE CONSIDERED CAREFULLY WHEN

7HERE TO SELL SELECTING DISTRIBUTION CHANNELS )F A MARKETING PROlLE HAS AN ENTIRELY
n INSIDE OR OUT INTRA REGIONAL FOCUS IT IS OFTEN DIFlCULT TO lND APPROPRIATE PARTNERS
SIDE AN /-)S IN THE PROCESSING WHOLESALING OR RETAILING SECTOR /FTEN IN THIS CASE
REGION COMPROMISES MUST BE MADE /N THE OTHER HAND HOWEVER SPATIAL
FOCUS AND SEARCH FOR REGIONAL MARKET PARTNERS IS LESS IMPORTANT FOR
/-)S THAT FOCUS MAINLY ON @EXPORTING LARGE VOLUMES OF COMMODITY
PRODUCTS OUTSIDE THEIR REGION .ATIONWIDE MARKET PARTNERS GENERALLY
NEED LARGE SUPPLY VOLUMES AND DEMAND A VERY PROFESSIONAL MARKET
ING RELATIONSHIP 4HEY ARE ALSO OFTEN UNABLE TO EMPHASISE ADEQUATELY
THE REGIONAL ORIGIN OF PRODUCTS
/NE IMPORTANT QUESTION THAT NEEDS TO BE CONSIDERED FROM THE

EXCLUSIVENESS OR START OF AN /-) PROJECT IS WHETHER THE /-) HAS A PREFERENCE FOR US
BROAD MARKET ING SEVERAL CHANNELS TO SELL THEIR PRODUCTS OR WISHES TO CONCENTRATE
PENETRATION EXCLUSIVELY ON ONE COMPANY OR ONE MAIN SALES CHANNEL
"OTH EXCLUSIVENESS AND BROAD MARKET PENETRATION BRING ADVAN
TAGES AND DISADVANTAGES THAT MUST BE CONSIDERED CAREFULLY 4HE MORE
CHANNELS USED THE MORE EFFORT IS NEEDED TO MANAGE NEGOTIATIONS OR
TO FULlL THE DAILY CHANGING NEEDS OF THE MARKET PARTNERS 4HE FEWER
CHANNELS ARE USED THE FEWER SELLING AND SERVICE ACTIVITIES ARE NEEDED
&URTHERMORE CHOOSING AN EXCLUSIVE MARKET DISTRIBUTION CHANNEL
PROVIDES THE POSSIBILITY OF SHORTENING THE SUPPLY CHAIN AND ENLARGING
THE PRODUCT VALUE $EPENDENCY ON MARKET PARTNERS AND THEREFORE
MARKET RISK WILL HOWEVER BE INCREASED
%VEN WHEN AN /-) HAS ONE MAJOR RELIABLE PARTNER THAT IS A

DEPENDENCY ON SMALL TO MEDIUM ENTERPRISE THERE IS A DANGER THAT THE ENTERPRISE
MARKET PARTNERS WILL MERGE WITH A BIGGER COMPANY 4HERE ARE COUNTLESS EXAMPLES
THAT SHOW THAT THE NEW BIGGER COMPANIES ARE OFTEN NOT WILLING TO
TAKE OVER THE REGION SPECIlC PRODUCTS OF AN /-) !NOTHER DANGER
INCLUDES CHANGES OVER THE YEARS IN THE KEY PERSONNEL RESPONSIBLE FOR
DEALING WITH THE /-) PROJECT )T IS OFTEN NOT CLEAR IF THE REPLACEMENT
PERSONNEL WILL SUPPORT THE /-) PROJECT IN A SIMILAR WAY 4HE ASPECT
OF DEPENDENCY IS THEREFORE QUITE IMPORTANT WHEN AN /-) CHOOSES A
MARKET PARTNER
!S MENTIONED BEFORE DISTRIBUTION CHANNELS SHOULD BE CHOSEN

IN ACCORDANCE WITH THE PRODUCT AND PRICE POLICY AS WELL AS THE MA

3TART UP PHASE
NAGEMENT CAPACITY OF THE /-) )F AN /-) TENDS TO SELL HIGH PREMIUM MARKET PARTNERS
PRODUCTS OR ORIGIN SPECIlC PRODUCTS MARKET PARTNERS SHOULD SHARE WITH A COMMON
THIS PHILOSOPHYAPPROACH 4HEREFORE THESE PARTNERS SHOULD ALSO SET OF OBJECTIVES
BE SELECTED WITH REGARD TO THEIR NON ECONOMIC OBJECTIVES AND THEIR STRATEGIES
IMAGE IN THE MARKETPLACE !RE THEIR OBJECTIVES SIMILAR TO THE /-)S
OBJECTIVES !RE THEY TRUSTWORTHY AND ABLE TO PAY ON TIME
$ISCOUNTERS FOR EXAMPLE GENERALLY NEED LARGE REGULAR SUPPLY
VOLUMES AND DEMAND VERY PROFESSIONAL SPECIlC PRODUCT ATTRIBUTES
WITH REGARD TO SIZE PACKAGING ETC 4HEY ARE OFTEN UNABLE TO EM
PHASISE REGIONAL ORIGIN AND THEY WANT TO SELL PRODUCTS AT A RELATIVELY
LOW PRICE TO CONSUMERS &OR MOST /-)S THEREFORE SMALLER REGIONAL
WHOLESALERS SMALLER SHOPS WEEKLY MARKETS BOX SCHEMES OR NATURAL
HEALTH FOOD SHOPS SEEM TO BE MORE SUITABLE PARTNERS
#USTOMER SERVICES INCLUDE ALL THE LOGISTIC SYSTEMS THAT ARE NEC CUSTOMER
ESSARY TO MAKE A PRODUCT AVAILABLE STOCK HOLDING EFlCIENT DELIVERY SERVICES
SYSTEMS ORDER PROCESSING AND DOCUMENTATION PACKAGING !LL THESE
ACTIVITIES ARE QUITE EXPENSIVE FOR AN /-) TO MANAGE ALONE -ANAGING
THEM REQUIRES A CONSTANT LEVEL OF ATTENTION TO CUSTOMER WISHES AND
CHANGES IN THE MICRO AND MACRO ENVIRONMENTS &AILURE IN ANY OF
THESE AREAS COULD RESULT IN LOST SALES OR CONTRACTS DUE TO UNSATISlED
CUSTOMERS OR MIGHT ALSO LEAD TO A LOSS OF REPUTATION WITHIN THE MAR
KET /NE OF THE MAIN STRATEGIC QUESTIONS WITH REGARD TO A DISTRIBUTION
POLICY THEN IS TO DECIDE WHICH CUSTOMER SERVICES AN /-) IS WILLING
AND ABLE TO UNDERTAKE ON ITS OWN AND WHICH MUST BE OUTSOURCED
4HE STRATEGIC RELEVANCE OF CUSTOMER SERVICES IS OFTEN UNDERESTI STRATEGIC

MATED BY /-)S BECAUSE FARMERS TEND TO THINK MAINLY ABOUT PRODUC RELEVANCE OF CUS
TION AND PRODUCT QUALITY !T BEST THEY MIGHT PERHAPS IMAGINE THAT AN TOMER SERVICE
ATTRACTIVE LOW PRODUCT PRICE WOULD GUARANTEE A SALES CONTRACT (OW
EVER IN AN INCREASINGLY SATURATED FOOD MARKET ENVIRONMENT AND IN AN
INCREASING NUMBER OF CASES CUSTOMER SERVICES CAN BE MORE CRUCIAL TO
THE PURCHASE DECISION OF A RETAILER OR A CATERER THAN THE PRODUCT PRICE
OFFERED "ECAUSE THE COST OF CUSTOMER SERVICES IS SO HIGH IT IS IMPOR
TANT TO IDENTIFY AN OPTIMUM LEVEL OF SERVICE ACTIVITIES THAT SATISFY THE
CUSTOMERS ON THE ONE HAND AND ARE ALSO EFlCIENT ON THE OTHER !N
/-) SHOULD THEREFORE FOCUS CLEARLY ON THE PRIORITIES AND REQUIRE
MENTS OF ITS MAIN MARKET PARTNERS EG THE REQUIRED FREQUENCY OF
DELIVERY AND THE SERVICE LEVELS THAT ITS MAIN COMPETITORS PROVIDE

%FFECTIVE AND EFlCIENT CUSTOMER SERVICE REQUIRES PERMANENT

MONITORING OF AN /-)S PERFORMANCE AND THAT OF ITS COMPETITORS
THROUGH MONITORING ACTIVITIES AND MARKET RESEARCH
4HE CHOSEN DISTRIBUTION CHANNELS DIRECTLY INmUENCE COMMU

DISTRIBUTION NICATION POLICY TOO )F THE PRODUCTS OF AN /-) ARE SOLD DIRECTLY TO
CHANNELS AND CONSUMERS BY THE /-) ITSELF EG VIA BOX SCHEMES /-) MEMBERS
PROMOTION HAVE A BETTER CHANCE OF DIRECTLY COMMUNICATING WITH CONSUMERS
POLICY 4HEY CAN CONVINCE CONSUMERS OF PRODUCT AUTHENTICITY BY EXPLAINING
HOW THE PRODUCT IS PRODUCED OR PROCESSED 4HIS SITUATION CHANGES
WHEN /-) PRODUCTS ARE SOLD VIA SUPERMARKETS OR OTHER NON /-)
CHANNELS &IRST THE PRODUCTS MUST COMMUNICATE THE MAIN MESSAGES
INDEPENDENTLY EG BY LABELLING 3ECOND THE PERSON RESPONSIBLE IN A
SALES OUTLET MUST BE MOTIVATED TO PLACE THE PRODUCTS IN A FAVOURABLE
POSITION FOR SALE 4HESE SALES STAFF SHOULD ALSO BE BRIEFED ON THE NEC
ESSARY INFORMATION REQUIRED TO BE ABLE TO CONVINCE CONSUMERS ABOUT
THE PROPERTIES AND ADDED VALUES OF THE PRODUCTS
4HE CHANNELS THROUGH WHICH PRODUCTS PASS DIRECTLY DETERMINE

DISTRIBUTION THE REVENUE RECEIVED 'ENERALLY SPEAKING THE MORE DIRECT THE CONTACT
CHANNELS AND FROM THE PRODUCER TO THE CONSUMER EG DIRECT SALES RETAILER DELIVERY
PRICE POLICY THE HIGHER THE SALES PRICE WILL BE AND VICE VERSA !LSO THE INmUENCE
THAT PRODUCERS HAVE ON THE CONSUMER SALES PRICE FALLS THE LONGER THE
DISTRIBUTION CHAIN AND VICE VERSA &OR INSTANCE IF A PREMIUM QUALITY
HIGH PRICE STRATEGY IS PLANNED SUPPLIES SOLD THROUGH PRICE AGGRESSIVE
RETAILERS OR DISCOUNTERS SHOULD BE AVOIDED )F FOR EXAMPLE CONSUM
ERS BUY A PREMIUM /-) PRODUCT AT A LOW PRICE ON THE SUPERMARKET
SHELF THEY MAY NOT BELIEVE THAT THEY HAVE BOUGHT A PREMIUM PRODUCT
4HIS ILLUSTRATES HOW THE IMAGE OF A WHOLE /-) AND ITS PRODUCTS CAN
DEVELOP IN A WAY THAT CONTRADICTS ITS INTENTIONS
/F COURSE THE STAFF REQUIREMENTS AND INVESTMENT EG TO RUN
A BOX SCHEME ARE RELATIVELY HIGH "EFORE A DISTRIBUTION CHANNEL IS
CHOSEN THEREFORE AN EXACT CALCULATION OF THE GROSS MARGIN AND THE
RETURN ON INVESTMENT SHOULD BE CARRIED OUT FOR EACH ALTERNATIVE 4HE
CHANNEL WITH THE HIGHEST SALES PRICE DOES NOT NECESSARILY RESULT IN THE
HIGHEST PROlT
4HE LONGER AND MORE COMPLEX TRANSPORTATION OF THE FOOD FROM

THE /-)S LOCATION TO THE CUSTOMER THE GREATER THE NEED IS FOR SPECIAL

3TART UP PHASE
TRANSPORT AND PACKAGING SYSTEMS TO GUARANTEE CONSISTENT HIGH QUALITY

IE FRESHNESS SHELF LIFE ETC FOOD SAFETY AND TRACEABILITY OF PRODUCTS
)T IS IMPORTANT THAT THE PARTICULAR REQUIREMENTS OF CUSTOMERS ARE DISTRIBUTION
CONSIDERED WHEN SELLING VIA NEW CHANNELS 4HIS OFTEN NEEDS OTHER LO POLICY AND
GISTICS SYSTEMS EG COOLING SYSTEMS AND ADDITIONAL SERVICES EG DE PRODUCT POLICY
LIVERY TIME REQUIREMENTS THAT OFTEN CANNOT BE PROVIDED BY THE /-)
ITSELF WITHOUT CONSIDERABLE INVESTMENT )N GENERAL THE DEPENDENCIES
OF THE WHOLE SYSTEM WILL BE MUCH HIGHER AND IN MOST CASES SO WILL
THE COSTS FOR DISTRIBUTION EG FOR LABELLING AND PACKAGING MATERIAL OR
SPECIAL ANALYTICAL TESTS
7HENCHOOSINGADISTRIBUTIONCHANNELITISIMPORTANTTOCONSIDER
WHETHER PRODUCTS ARE TO BE SOLD IMMEDIATELY OR STORED AND SOLD LATER
EG IN THE CASE OF MORE DURABLE PRODUCTS LIKE GRAIN CARROTS OR POTA
TOES 4HE LONGER AFTER HARVESTING THE PRODUCTS ARE SOLD THE HIGHER
THE PRICE IN MOST CASES "UILDING UP STORAGE OR PROCESSING CAPACITY
OFTEN INVOLVES SUBSTANTIAL INVESTMENT #O OPERATION AMONG SEVERAL
FARMERS ALLOWS MORE EFlCIENT USE OF STORAGE OR PROCESSING CAPACITIES
4HE TYPE OF CUSTOMERS ALSO INmUENCES QUALITY EXPECTATIONS
RELATING TO /-) PRODUCTS /F COURSE EVERY CUSTOMER EXPECTS TO BUY
QUALITY PRODUCTS THE LEVEL OF QUALITY REQUIREMENTS HOWEVER DEPENDS
HEAVILY ON WHETHER PRIVATE CONSUMERS OR COMMERCIAL COMPANIES
PURCHASE THE PRODUCTS 7HILE A CERTAIN DEGREE OF QUALITY HETEROGENE
ITY IS EXPECTED WHEN SELLING DIRECTLY TO CONSUMERS EG LARGER AND
SMALLER FRUIT SOLD AT ONE PRICE LARGE WHOLESALERS OR RETAILERS EXPECT
HOMOGENEOUS QUALITY AT A HIGHER LEVEL 4HIS MEANS THAT ALREADY IN
THE PRE START PHASE WHEN SELECTING A DISTRIBUTION CHANNEL AN /-)S
CHOICES WITH REGARD TO QUALITY ASSURANCE NEED TO BE CLEAR
! FURTHER CROSS RELATION BETWEEN PRODUCT AND DISTRIBUTION POL
ICY CONCERNS THE VOLUME OF PRODUCTION 'ENERALLY SPEAKING RETAILERS
AS DIRECT MARKET PARTNERS HAVE HIGHER EXPECTATIONS WITH REGARD TO
DEMANDING PRODUCT VOLUMES THAN PROCESSORS OR WHOLESALERS 4HERE
FORE LARGER /-)S THAT CO ORDINATE THE PRODUCTION OF MANY PRODUCERS
REGIONWIDE OR NATIONWIDE TEND TO BE MORE INTERESTING MARKET PART
NERS FOR RETAILERS AS THEY CAN TRY TO ESTABLISH A REGIONAL FARM PRODUCT
LINE OR NATIONALLY DISTRIBUTED ORGANIC LABELLING SCHEME
! CHECKLIST FOR THE SELECTION OF DISTRIBUTION CHANNELS

,AST BUT NOT LEAST A LIST OF RELEVANT QUESTIONS WILL HELP AN /-) MAKE
THE RIGHT DECISIONS CONCERNING THE SELECTION OF APPROPRIATE DISTRIBU

TION CHANNELS 4HE ANSWERS MAY WELL DETERMINE WHETHER AN /-)

REMAINS RELATIVELY DEPENDENT ON PROCESSORS OR WHOLESALERS AS A RAW
MATERIAL SUPPLIER OR WHETHER IT BECOMES MORE INDEPENDENT AS A SELF
CONTAINED MARKET ACTOR

THE RIGHT DISTRIBUTION STRATEGY
Q !RE THE VISIONS OBJECTIVES AND MARKET SIZES OF A POTENTIAL MAR
KET PARTNER APPROPRIATE IN TERMS OF THE /-)S OWN PHILOSOPHY
AND STRUCTURE
Q )S THE GENERAL PRODUCT POSITIONING OF A POTENTIAL MARKET PARTNER
APPROPRIATE IN TERMS OF THE /-)S EXPECTATIONS PREMIUM VER
SUS DISCOUNT
Q !RE CONTRACTS OVER LONGER PERIODS POSSIBLE OR IS THE POTENTIAL
PARTNER ACTING ON A SPOT MARKET
Q (OW IS THE CHANNEL CO ORDINATION MANAGED IE BY CONTRACTUAL
AGREEMENT OR JUST BY INFORMAL RELATIONSHIPS
Q #AN THE PRODUCTS BE SOLD REGULARLY THROUGHOUT THE YEAR OR ONLY
DURING CERTAIN SEASONS
Q )S THE /-)S SUPPLY QUALITY SUITABLE FOR THE REQUESTED QUALITY OF
THE POTENTIAL MARKET PARTNER
Q 7HICH PARTNER IS RESPONSIBLE FOR QUALITY ASSURANCE AND PROMO
TION ACTIVITIES FOR THE PRODUCTS -ANY RETAILERS DEMAND A FEE FOR
EXAMPLE FOR LISTING PRODUCTS OR FOR PROMOTIONAL ACTIVITIES WHEN
THEY ENTER INTO AN AGREEMENT
Q )S THE /-)S PRICE EXPECTATION APPROPRIATE IN TERMS OF THE PRICE
EXPECTATION OF THE POTENTIAL MARKET PARTNER
Q $OES THE /-) HAVE SUFlCIENT HUMAN AND lNANCIAL CAPITAL FOR
INVESTMENT IN LOGISTIC INFRASTRUCTURE AND CUSTOMER SERVICES
Q $OES THE /-) HAVE PROCESSING RESOURCES EG FOR DELIVERY TO
CAFETERIAS AND STORAGE RESOURCES OR NOT
Q 7ILL THE MARKET PARTNER ACCEPT AN /-)S OWN PRODUCER BRAND AS
OPPOSED TO RETAILERS OWN TRADEMARKS OR NOT
Q 7HICH PART OF CUSTOMER SERVICE IS AN /-) WILLING AND ABLE TO
PROVIDE
Q 7HICH MEANS OF DISTRIBUTING PRODUCTS PROMISES THE HIGHEST
LONG TERM PROlT

3TART UP PHASE
0RODUCT POLICY
7HEN FARMERS DISCUSS AGRICULTURAL PRODUCTS THEY LIKE TO SPEAK ABOUT
THE PRODUCTION PROCESS AND THE ENORMOUS EFFORTS THAT ARE RELATED TO
PRODUCTION 'ENERALLY SPEAKING MOST FARMERS PREFER TO SELL HIGHER MARKET ORIENTA
QUANTITIES OF THEIR HARVEST IRRESPECTIVE OF QUALITY "ECAUSE OF THIS TION REPLACES
THEY LOSE PART OF THE MARKET RELEVANT TO THEIR PRODUCTS 0RODUCERS PRODUCTION
MUST THEREFORE CHANGE FROM A MORE PRODUCER ORIENTED WAY OF THINK ORIENTATION
ING TO A MORE MARKET AND CUSTOMER ORIENTED WAY OF THINKING 7HEN
CHOOSING AN APPROPRIATE NAME FOR A LABEL OR BRAND PROGRAMME FOR
EXAMPLE A NAME SHOULD BE SELECTED THAT PERSUADES THE CUSTOMER
RATHER THAN SATISlES THE FARMER $O NOT FORGET THAT CONSUMERS OFTEN
SPEAK A COMPLETELY DIFFERENT LANGUAGE TO THAT OF FARMERS AND HAVE
DIFFERENT MEANINGS AND IMAGES IN MIND WHEN THEY HEAR THE NAME OF
A LABELBRAND
$UE CONSIDERATION MUST BE GIVEN TO THE FACT THAT THE OBJECTIVE IMPORTANCE
QUALITIES THAT INmUENCE A CONSUMERS BUYING DECISIONS ARE THE IM OF PRODUCT
AGE AND APPEARANCE OF A PRODUCT 3EVERAL STUDIES OF BEER AND WINE APPEARANCE AND
IN 'ERMANY FOR EXAMPLE SHOWED THAT CONSUMERS RANKED WELL PRE PRESENTATION
SENTED PRODUCTS MORE FAVOURABLY DURING A TASTE TEST (OWEVER THE
QUALITY RANKING WAS COMPLETELY DIFFERENT WHEN THE SAME PRODUCTS
WERE TASTED IN A BLIND TEST /THER TESTS SHOWED THAT THE SAME WINE
PRESENTED IN THREE DIFFERENT BOTTLES AND PRESENTATION STYLES WAS EVALU
ATED COMPLETELY DIFFERENTLY BY ALL TESTED CONSUMERS DURING A TASTING
4HIS MEANS THAT MANY CONSUMERS DETERMINE PRODUCT QUALITY DIRECTLY
ON THE BASIS OF APPEARANCE 0RODUCT QUALITY ATTRIBUTES IN A CLASSI
CAL VIEW SOMETIMES PLAY A MINOR ROLE IN BUYING DECISIONS 4HIS OF
COURSE DOES NOT INDICATE THAT CONSUMERS DO NOT CARE ABOUT THESE
ASPECTS OF QUALITY
1UALITATIVE CONSUMER SURVEYS IN !USTRIA HAVE SHOWN THAT CON CONSUMER EXPEC
SUMERS EXPECT THE FOLLOWING CHARACTERISTICS WHEN THEY BUY REGIONAL TATIONS RELAT
FARM PRODUCTS ING TO PRODUCT
POLICY
PRODUCTS MUST PROVIDE A CERTAIN DEGREE OF CONVENIENCE
PRODUCTS MUST BE OF A CERTAIN HOMOGENEITY
PRODUCTS MUST SUGGEST A SPECIlC AND AUTHENTIC WAY OF PRODUC
TION
PRODUCTS MUST BE SUITABLE TO NORMAL DIETS

@4ALKION ,EIPOMO &INLAND

)NVESTMENT IN PRODUCT DEVELOPMENT TO MAINTAIN A LEADING POSI
TION AS A BAKERY
4ALKION ,EIPOMO IS A BAKERY WITH AN ANNUAL TURNOVER OF OVER MIL
LION %UROS AND ABOUT EMPLOYEES )T WAS FOUNDED IN AND
LAUNCHED ORGANIC PRODUCTS IN EARLY S IN A PERIOD OF DEEP ECONOMIC
RECESSION 4HE AVAILABILITY OF ORGANIC RAW MATERIALS WAS LIMITED /R
GANIC BREAD AT THAT TIME HAD NOVELTY VALUE AND THE COMPANY SAW A
CLEAR OPPORTUNITY WITH IT 4ALKION ENTERED INTO DIRECT CONTRACTS WITH THE
FARMERS TO SECURE THE RAW MATERIALS 4HEY THEN INVESTED SIGNIlCANTLY
IN PRODUCT DEVELOPMENT WHICH THEY STILL SEE AS VERY IMPORTANT FOR
MAINTAINING THEIR LEADING POSITION ON ORGANIC BREAD MARKETS
"EFORE LAUNCHING NEW PRODUCTS THEY WORKED TO GET THEIR OWN PERSON
NEL AND RETAIL PURCHASERS COMMITTED TO ORGANIC PRODUCTS !LSO SALES
REPRESENTATIVES AND PRODUCT DEMONSTRATORS WERE WELL TRAINED 3TAFF
HAVE CONTINUED TO PARTICIPATE ACTIVELY IN 2$ WORK 4HE COMPANY HAS
INCREASED THE ORGANIC SHARE OF THEIR PRODUCTION AND ACTIVELY LAUNCHES
INNOVATIVE NEW PRODUCTS INTO THE MARKET
#ONCERNING PRODUCT QUALITY DElNED QUALITY ASSURANCE SYSTEMS

CAN HELP TO STANDARDISE PRODUCTION AND PRODUCT QUALITY THROUGHOUT
THE WHOLE PROCESS OF PRODUCTION AND OVER TIME 4HIS MAKES AN /-)S
PRODUCTS MORE ATTRACTIVE TO POTENTIAL TRADERS AND ASSURES THE CON
SUMER THAT THEY CAN BUY THE SAME PRODUCT AND BE GUARANTEED OF ITS
QUALITY AND AVAILABILITY OVER TIME
0RODUCT POLICY DECISIONS MUST ALWAYS BE MADE ON THE BASIS OF

NARROW OR BROAD BUSINESS OBJECTIVES AND CHOSEN STRATEGIES !CCOUNT MUST HOWEVER BE
PRODUCT RANGE TAKEN OF THE FACT THAT AN /-) MAY IN MANY CASES HAVE LIMITED OP
PORTUNITIES TO PRODUCE AND PROCESS PRODUCTS 4HIS COULD IN TURN DE
TERMINE ALL OTHER RELATED MARKETING ASPECTS &OR MOST /-)S THE BASIC
PRODUCT DECISION IE WHICH PRODUCTS CAN BE PROVIDED IS LIMITED BY
THE NATURAL ENVIRONMENT EG MOUNTAIN AREAS WHICH TEND TO ALLOW
THE PRODUCTION OF MILK BEEF AND SHEEP AND CLIMATIC CONDITIONS

3TART UP PHASE
DRY OR WET AREAS (OWEVER PRODUCT CHOICE CAN BE FURTHER RESTRICTED

BY LEGAL AND HYGIENE ASPECTS WHICH CAN LIMIT LOW COST MILK OR MEAT
PROCESSING ON FARMS
4HE DESIRED PRODUCT ASSORTMENT CAN BE BASED EITHER ON ONE
PRODUCT OR ON A RELATIVELY BROAD ASSORTMENT 4HE BROADER THE ASSORT
MENT THE LESS RISKY THE MARKETING BECAUSE SELLING ACTIVITIES ARE BASED
ON DIFFERENT PILLARS 4HERE IS THE DISADVANTAGE HOWEVER THAT BROAD
ASSORTMENTS OFTEN LEAD TO THE EFFECT OF LESS SPECIALISATION AND THE EF
FECTS OF ECONOMIES OF SCALE ARE REDUCED 4HE SMALLER THE ASSORTMENT
THE MORE SPECIALISATION IS POSSIBLE
!NOTHER ASPECT RELATES TO THE PRODUCT RANGE )F AN /-) PRO
CESSES CHEESE FROM ITS OWN MILK A DECISION MUST BE MADE ABOUT HOW
MANY DIFFERENT TYPES OF CHEESE SHOULD BE PRODUCED 4HE BROADER THE
PRODUCT RANGE THE MORE COST INTENSIVE IT IS (OWEVER IT ALSO PROVIDES
A MORE ATTRACTIVE ASSORTMENT FOR POTENTIAL MARKET PARTNERS ! WELL
BALANCED ASSORTMENT POLICY DECISION SHOULD THEREFORE BE MADE TO
ENSURE THAT THE REQUIREMENTS OF THE CHOSEN MARKETING STRATEGY AND
THE EXPECTATIONS OF THE MAIN MARKET PARTNERS ARE FULlLLED
@4HISE -EJERI $ENMARK

,ARGE ASSORTMENT OF DAIRY PRODUCTS WITH INNVOVATIVE PRODUCT
DEVELOPMENT
4HISE -EJERI IS A SMALL $ANISH ORGANIC DAIRY LOCATED IN THE NORTHERN
*UTLAND 4HE DAIRY IS OWNED BY ORGANIC FARMERS WHO PRODUCE
MILLION KG MILKYEAR 4HE DAIRY FOLLOWS A DIVERSIlCATION STRATEGY WITH
MANY PRODUCT VARIETIES DIFFERENT PRODUCT NUMBERS IN RELATIVELY
SMALL VOLUMES 4HE DAIRY HAD DEVELOPED A VERY STABLE SUPPLIER SYS
TEM BUT THEY ARE VERY SENSITIVE TO COMPETITION IN THE MARKETPLACE
FROM BIGGER COMPANIES )T HAS A HIGH PUBLIC PROlLE AND THIS PROlLE IS
USED BY THE SUPERMARKET CHAINS IN THEIR COMPETITION /NE SUPERMAR
KET RETAIL CHAIN IN PARTICULAR OWNED BY #//0 MARKETS THE PRODUCTS
AND UP TO OF THE MILK THEY SELL IS ORGANIC FROM THIS DAIRY
)T IS CLEAR THAT INNOVATIVE PRODUCT DEVELOPMENT PLAYS A VERY CENTRAL
ROLE IN THIS COMPANY !S THE COMPANYS DAIRYMAN SAYS
@4HE ONLY WAY WE CAN SURVIVE IN A MARKET THAT IS DOMINATED BY GIANTS
IS BY RAPID DEVELOPMENT OF NEW QUALITY PRODUCTS
3OURCE 4ECHNICAL 5NIVERSITY OF $ENMARK ,YNGBY $ENMARK

4HE @4HISE -EJERI PRODUCES A LARGE ASSORTMENT OF ORGANIC MILK PRODUCTS

0HOTO 4 .IELSEN
#USTOMERS PURCHASE PRODUCTS BASED ON GENERAL OBJECTIVES THAT

PRODUCT THEY TRY TO ACHIEVE BY OBTAINING CERTAIN ATTRIBUTES FROM THE PRODUCT
CHARACTERISTICS &OR INSTANCE A MULTIPLE RETAILER TRIES TO POSITION ITS ASSORTMENT AS
A HIGH PREMIUM PROGRAMME )N THIS CONTEXT THIS RETAILER TRIES TO
PURCHASE MAXIMUM PRODUCT QUALITY ATTRIBUTES AS WELL AS SOCIAL AND
ECOLOGICAL STANDARDS 4HIS IS BECAUSE CONSUMERS THAT PREFER PREMIUM
PRODUCTS ALSO OFTEN EXPECT THE PRODUCTS TO BE PRODUCED IN A SOCIALLY
AND ECOLOGICALLY SOUND WAY 4HEREFORE THE PURCHASING MANAGER OF
THIS RETAILER WOULD PROBABLY EVALUATE THE PRODUCTS ON THE BASIS OF THE
FOLLOWING ATTRIBUTES
Q &UNCTIONAL ATTRIBUTES EG NUTRITIONAL VALUES CONSISTENCY TASTE

ADDITIVES APPEARANCE PACKAGING READY TO COOK
Q !DDED VALUE ATTRIBUTES EG ATTRACTIVE BRAND SPECIALITYNOVELTY
PRODUCED UNDER ECOLOGICALSOCIAL CONCERNS TRADITIONAL PRODUC
TION METHOD

3TART UP PHASE
&UNCTIONAL ATTRIBUTES HAVE A CENTRAL SIGNIlCANCE AND REPRESENT

THE EXPECTED CORE COMPETENCE OF A PRODUCT &EW CONSUMERS WOULD PURCHASE DECI
BUY AN ORGANIC APPLE SOLELY BECAUSE OF THE FACT THAT IT IS @ORGANIC IF SIONS DEPEND ON
FOR EXAMPLE THE PRODUCTS APPEARANCE ARE NOT ACCEPTABLE TO THEM ADDED VALUE
(OWEVER IN A SATURATED MARKET ENVIRONMENT WHERE ALMOST ALL SUP
PLIERS PROVIDE THE FUNCTIONAL ATTRIBUTES AT HIGH STANDARDS /-)S MUST
LOOK MAINLY FOR ADVANTAGES IN THE ADDED VALUE ATTRIBUTE AREA !DDED
VALUE ATTRIBUTES ARE THE MAIN REASON WHY CONSUMERS ARE WILLING TO
PAY MORE FOR 0RODUCT ! OVER 0RODUCT " EVEN THOUGH IT HAS SIMILAR
FUNCTIONAL ATTRIBUTES EG DO CONSUMERS MAY ACCEPT HIGHER PRICES FOR
MEAT IF ANIMAL WELFARE IS A SPECIAL CONCERN OF THE /-)S PRODUCTION
STANDARDS
)T IS IMPORTANT TO KEEP IN MIND HOWEVER THAT ACTORS WITHIN THE

DISTRIBUTION CHAIN WEIGHT ATTRIBUTES DIFFERENTLY 0ROCESSORS FOR EXAM
PLE ARE MORE INTERESTED IN FUNCTIONAL ATTRIBUTES OF THE RAW MATERIALS
THAT ARE IMPORTANT FOR THEIR PROCESSING METHODS EG CONSISTENCY
WHILE RETAILERS EXPECT PRODUCTS WITH FUNCTIONAL ATTRIBUTES THAT ARE
MORE IMPORTANT FOR CONSUMERS EG TASTE AND ADDITIONALLY PRO
DUCTS WITH ADDED VALUE ATTRIBUTES
4HE DEVELOPMENT OF REAL BRANDS THAT COMMUNICATE UNDERLYING

VALUES IS ONE OF THE MOST IMPORTANT BUT ALSO CHALLENGING SUCCESS
FACTORS IN MARKETING 4ODAY ONE OF THE MAIN FACTORS FOR FAILURE IN
THE %UROPEAN ORGANIC INDUSTRY IS THE LACK OF WELL KNOWN AND HIGHLY
PREFERRED BRANDS !NALYSIS OF /-)S SHOWS THAT GENERAL /-)S WITH AN BRANDS AND LA
ATTRACTIVE BRAND ARE ABLE TO PERFORM SUCCESSFULLY IN THE MARKET 4HE BELLING SCHEMES
BRAND CAN BE DEVELOPED EXCLUSIVELY AT THE PRODUCER LEVEL BUT IN ORDER
TO CREATE EFFECTIVE SYNERGIES IT IS CLEARLY RECOMMENDED THAT AN /-)
MUST INTEGRATE PROCESSORS AND RETAILERS INTO THE PROCESS
"RANDS REDUCE THE CUSTOMERS RISK OF BUYING @BLACK BOX GENERIC

PRODUCTS &OR /-)S BRANDS PROVIDE THE POSSIBILITY OF ATTAINING HIGH
ER CUSTOMERCONSUMER LOYALTY 4HIS HELPS IN PERIODS WHEN THE PUR
CHASING DECISIONS OF MANY CONSUMERS ARE MORE FOCUSSED ON CHEAPER
PRICES THAN ON BETTER QUALITY 4HE PROBLEM UNDERLYING THIS IS THAT
CONSUMERS TEND TO COMPARE PRICES MORE EASILY THAN QUALITY STAND
ARDS AND THEY OFTEN DISTRUST QUALITY PROMISES IF THEY ARE NOT LINKED
TO WELL KNOWN BRANDS AND RELIABLE QUALITY ASSURANCE PROGRAMMES

!TTRACTIVE ORGANIC BRANDS ARE ABLE

ALSO TO CONVINCE CRITICAL CONSUMERS
0HOTO ,A 4ERRA E IL #IELOS )TALY
SYSTEMS "RANDS GIVE CONSUMERS THE CERTAINTY OF A DElNED STANDARD OF

QUALITY (OWEVER IT IS STILL IMPORTANT TO REALISE THAT IN ORDER TO MAKE
A BRAND WELL KNOWN AND EVOKE THE DESIRED IMAGE AGGRESSIVE PROMO
TION ACTIVITIES ARE NECESSARY
&OR PRODUCTS WITH A SPECIlC REGIONAL FOCUS /-)S OFTEN USE A

REGIONAL BRAND IN PARTICULAR WHEN THE PRODUCTS ARE TO BE SOLD IN THEIR
OWN REGION )N SUCH CASES THE USE OF MORE THAN ONE BRAND MIGHT BE
USEFUL
@*UVAN ,UOMU &INLAND

3TRENGTHENING THE COMPANYS OWN BRAND BY USING A STRONG BRAND
OF A LARGE COMPANY
"ECAUSE OF A STRATEGIC ALLIANCE WITH THE LEADING NATIONAL DAIRY THIS
COMPANY HAS THE POSSIBILITY OF USING A VERY WELL KNOWN NATIONAL DAIRY
BRAND 4HIS BRAND IS ONE OF THE MOST VALUED BRANDS IN &INNISH BUSI
NESS 4HE COMPANY NAME *UVAN ,UOMU IS STILL SEEN ON THE PRODUCTS
BUT THE NATIONAL BRAND IS MUCH BETTER KNOWN AND CONSUMERS AND
RETAILERS TRUST IT )N ADDITION THE PARTNER IS ABLE TO SUPPORT THE BRAND
VERY EFFECTIVELY THROUGH DIFFERENT PROMOTIONAL ACTIVITIES WHICH THE
COMPANY ITSELF CANNOT AFFORD 4HE PARTNER TAKES GOOD CARE OF THE OR
GANIC BRAND WHILE IT IS PART OF ITS OWN IMAGE TOWARDS THE CONSUMERS
AND IS A SUPPORT IN CONlDENCE BUILDING

3TART UP PHASE
@3TYRIA "EEF !USTRIA

,OSING THE STRONG POTENTIAL OF A REGIONAL BRAND BY EXPANDING IN
LARGE MARKETS
! REGIONALLY BASED INITIATIVE FOR MARKETING ORGANIC BEEF FROM SUCKLER
COWS PROVIDES A GOOD EXAMPLE OF NEGLECTING APPROPRIATE BRAND POLICY
IN THE HOME MARKET "EGINNING WITH ABOUT FARMERS THE INITIATIVE
RAPIDLY INCREASED ITS MEMBERSHIP DUE TO PROFESSIONAL MANAGEMENT
AS WELL AS THE CREATION OF A STRONG REGIONALLY BASED BRAND 4HE FOCUS
WAS THEREFORE PLACED ON DEVELOPING NEW MARKETS
7ITH THE INCREASING NUMBER OF PRODUCERS THE STRATEGY OF THE /-)
SWITCHED FROM REGIONALLY BASED DISTRIBUTION CHANNELS lRST TO NATION
WIDE AND THEN TO INTERNATIONAL MARKET CHANNELS WHICH lNALLY LED
TO NEGLECT OF THE REGIONAL ORIGIN .OWADAYS THEREFORE DUE TO THE
INCREASING SUPPLY OF ORGANIC PRODUCTS ALL OVER %UROPE THE /-) HAS
LOST ITS MOST IMPORTANT FEATURE THAT GAVE IT UNIQUENESS AND NON INTER
CHANGEABILITY IN NEGOTIATIONS WITH LARGE PLAYERS NAMELY ITS REGIONAL
ORIGIN -OREOVER DUE TO DECREASING BRAND AWARENESS A COMEBACK ON
THE REGIONAL OR NATIONAL MARKET IS BECOMING MORE AND MORE DIFlCULT
)N THIS CASE THE /-) FAILED TO USE ITS ENORMOUS PREVIOUS BRAND POTEN
TIAL TO MAINTAIN A STRONG POSITION ON THE HOME MARKET IN ADDITION TO
ITS INTERNATIONAL ACTIVITIES 3OURCE 5NIVERSITY OF )NNSBRUCK !USTRIA
/NE OF THE MOST RELEVANT AREAS FOR MARKETING IMPROVEMENT AT

THE FARM LEVEL LIES IN PRODUCT QUALITY STANDARDISATION 6ARIABILITY AND PRODUCT QUALITY
DIVERSITY ARE ATTRIBUTES THAT ARE OFTEN ASSOCIATED WITH AND TEND TO BE STANDARDISATION
MAIN OBJECTIVES OF ORGANIC FARMING (OWEVER PROCESSORS AND RETAI
LERS ESPECIALLY EXPECT STANDARDISED QUALITY BECAUSE THIS IS THE BASIS FOR
EFlCIENT PROCESSING AND RETAILING 3TANDARDISATION IS ALSO NECESSARY TO
ENABLE NATIONAL AND INTERNATIONAL PURCHASE OF PRODUCTS BY PRODUCT
SPECIlCATION OR DESCRIPTION 4HIS IS PARTICULARLY IMPORTANT FOR FRUIT
AND VEGETABLE PRODUCTION AS WELL AS BEEF AND PORK FATTENING BY /-)
PRODUCERS WHERE DIFFERENT VARIETIES AND SPECIES ARE OFTEN SOLD UNDER
ONE MARKETING UMBRELLA &OR INSTANCE /-)S THAT PRODUCE BEEF FROM
SUCKLER COW FATTENING OFTEN SELL BEEF FROM UP TO DIFFERENT BREEDS
UNDER THE ONE BRAND 4HE QUALITY AND QUANTITY OF THE SLAUGHTERED
CARCASSES VARIES TREMENDOUSLY IN THESE CASES (OWEVER IF PRODUCTION

AND MARKETING IS CARRIED UNDER AN OWN BRAND OR LABELLING SCHEME

GREATER STANDARDISATION OF QUALITY IS ESSENTIAL TO MAINTAIN CUSTOMER
LOYALTY
$ESPITE EFFORTS TO IMPROVE AND STANDARDISE QUALITY IN AGRICUL

TURAL PRODUCTION FOR EXAMPLE THROUGH BREEDING PRODUCT QUALITY
DEPENDS STRONGLY ON THE SPECIES VARIETIES AND BREEDS USED )N SOME
REGIONS CERTAIN ANCIENT VARIETIES AND SPECIES ARE CULTIVATED AND SUP
PORTED (OWEVER FROM THE CUSTOMERS POINT OF VIEW BREEDS AND
VARIETIES RARELY CONTRIBUTE TO ADDED VALUE CHARACTER EVEN WHEN THIS
CHARACTERISTIC IS COMBINED WITH ORGANIC PRODUCTION /FTEN THE
FUNCTIONAL ATTRIBUTE QUALITY OF THESE PRODUCTS IS LOWER EG PORK WITH
A HIGHER FAT CONTENT AND LESS STANDARDISED THAN IN THE CASE OF PROD
UCTS THAT HAVE BEEN MODIlED BY BREEDING POWER
1UALITY VARIATIONS CAN BE SUCCESSFULLY DEALT WITH BY AN /-)

PRODUCT VARIA WITHIN THE MARKETING PROCESS BUT THIS REQUIRES SPECIAL EFFORTS WITH
TION FOR SPECIlC REGARD TO PRODUCT AND COMMUNICATION POLICY /-)S SHOULD NOT TRY
CUSTOMER NEEDS TO MIX PRODUCTS FROM DIFFERENT BREEDSVARIETIES OR ORIGINS AND SELL
THE MIX VIA ONE ORDINARY BRAND 3PECIAL BREEDS OR VARIETIES ARE BETTER
INTEGRATED INTO AN /-) OWNED LABELLING SCHEME 2ETAILERS BUTCHERS
OR BAKERS THAT ARE TRYING TO DIVERSIFY THEIR RANGES ARE OFTEN KEEN TO SELL
SPECIlC PRODUCTS FROM ANCIENT BREEDS AND VARIETIES
&OR PRODUCTS OF LOWER QUALITY OTHER POSSIBILITIES FOR FURTHER
PROCESSING MUST BE FOUND )F FOR INSTANCE AN ANCIENT PIG OR CATTLE
BREED HAS TOO SMALL A POTENTIAL FOR HIGH QUALITY MEAT PRODUCTION A
SPECIlC SAUSAGE LABELLING SCHEME COULD BE DEVELOPED LIKE THE WELL
KNOWN @#HORIZO SAUSAGES FROM A 3PANISH PIG BREED WITH A HIGH FAT
RATIO
0RODUCT QUALITY IS NORMALLY NOT ENOUGH IN ITSELF TO ATTRACT

PRODUCT POLICY CONSUMERS !MIDST THE mOOD OF INFORMATION AND THOUSANDS OF FOOD
AND COMMUNI PRODUCTS IN SUPERMARKETS OR HYPERMARKETS THERE IS A PROBABILITY THAT
CATION POLICY EVEN THE HIGHEST QUALITY IS NOT RECOGNISED BY CONSUMERS )NDEED
MANY QUALITY ATTRIBUTES ARE INTRINSIC ONES THAT CONSUMERS ARE UNABLE
TO DISCERN ON THE BASIS OF THE PRODUCTS APPEARANCE ALONE !LONGSIDE
PRODUCT DEVELOPMENT AND PRODUCTION PROCESS THEREFORE /-)S
SHOULD REMEMBER TO PROMOTE THEIR RANGES AND THE FUNCTIONAL AND
ADDED VALUE ATTRIBUTES OF THEIR PRODUCTS

3TART UP PHASE
-OST IMPORTANTLY NEW PRODUCT RELEASES SHOULD BE ACCOMPA

NIED BY HIGH INTENSITY PUBLIC RELATIONS OR ADVERTISING CAMPAIGNS IN
ORDER TO ATTRACT THE CONSUMERS ATTENTION
0RODUCT TASTING AT THE POINT OF SALE IS AN IMPORTANT MEASURE
TO CONVINCE CONSUMERS OF PRODUCT QUALITY !DDITIONALLY MEMBERS OF
THE /-) SHOULD BE ENCOURAGED TO PROMOTE THEIR PRODUCTS DIRECTLY
IN PERSON AT THE POINT OF SALE &ARMERS ARE ABLE TO INFORM CONSUMERS
DURING A TASTING ABOUT THE BACKGROUND OF THE PRODUCTION PROCESS
AND IN SO DOING HELP THE CONSUMERS TO UNDERSTAND THE UNIQUE CHA
RACTERISTICS OF THEIR PRODUCT SUCH AS PROCESSES IN ORGANIC PRODUCTION
OR SPECIlC ORIGINS OR VARIETIESBREEDS BEHIND THE PRODUCT
/RGANIC PRODUCERS HAVE LIMITED MEANS OF STANDARDISING PRO
DUCT QUALITIES BECAUSE THEY ARE UNABLE TO USE SYNTHETIC FERTILISERS AND
PESTICIDES "ECAUSE CONSUMERS AND RETAILERS ARE LARGELY UNAWARE OF
THIS IT MUST BE EXPLAINED DIRECTLY BY MEANS OF PRODUCT LEAmETS
)NCREASINGLY ORGANIC VARIETIES OF FRUIT AND VEGETABLE ARE BEING
DEVELOPED THAT ARE RESISTANT TO FUNGAL DISEASES 4HE PROBLEM IS THAT
THE RETAIL BUYERS AND CONSUMERS ARE OFTEN UNABLE TO KEEP UP WITH
THESE NEW NAMES AND ARE CONFUSED IF THEY CANNOT lND THE OLD VARIE
TIES 7HEN A NEW VARIETY APPEARS ON THE MARKET MOST PEOPLE AVOID
IT SINCE ITS TASTE QUALITIES ARE UNKNOWN )T IS THEREFORE RECOMMENDED
THAT A COLOUR BASED COMMUNICATION CONCEPT BE DEVELOPED IN WHICH
ALL NEW AND EXISTING VARIETIES ARE GROUPED TOGETHER UNDER GENERIC
@TASTE TYPES 5SING THIS SYSTEM CONSUMERS AND RETAIL PURCHASERS HAVE
NO PROBLEM IDENTIFYING VARIETIES THAT ARE SUITED TO THEIR PERSONAL TASTE
PREFERENCES
4HE PRICE EXPECTATION AND THE PRICE EVALUATION OF CONSUMERS

AND PURCHASERS OF PROCESSING WHOLESALING OR RETAILING COMPANIES
ARE CLOSELY CONNECTED TO THE TOTAL PRODUCT QUALITY SUM OF ALL RE PRODUCT POLICY
LEVANT PRODUCT ATTRIBUTES 7HILE PROCESSORS OR WHOLESALERS TEND TO AND PRICE POLICY
GIVE GREATER WEIGHT TO FUNCTIONAL ATTRIBUTES CONSUMERS TEND TO GIVE
GREATER WEIGHT TO THE ADDITIONAL AND EMOTIONAL QUALITIES OF A PRODUCT
WHEN THEY DElNE THEIR WILLINGNESS TO PAY FOR THE PRODUCT 4HE MORE
CONSUMERS ARE ABLE TO RECOGNISE SPECIlC QUALITIES AND QUALITY DIFFE
RENCES VIS Í VIS OTHER ORDINARY PRODUCTS THE GREATER THEIR WILLINGNESS
TO PAY A HIGHER PRICE
&OR RETAILERS OR ORGANIC SUPERMARKETS THAT ARE PARTNERS OR
MEMBERS OF AN /-) IT IS IMPORTANT TO UNDERSTAND THAT DIFFERENT

! CHECKLIST FOR THE SELECTION OF THE RIGHT PRODUCT POLICY
4HE ANSWERS TO THESE QUESTIONS FACILITATE THE SELECTION OF THE

RIGHT PRODUCT POLICY
Q (AS A CLEAR DECISION BEEN MADE AS REGARDS WHETHER TO SUPPLY
A MASS MARKET PRODUCT LIKE MILK OR A PREMIUM HIGH QUALITY
PRODUCT LIKE CHEESE OR SAUSAGES
Q )S THE PRODUCT DECISION BASED CLOSELY ON THE /-)S ABILITY TO
PROCESS THE RAW MATERIALS AND TO INmUENCE THE DISTRIBUTION
CHAIN TO FOLLOW THE SAME POSITIONING MAXIMS
Q $O THE PRODUCTS HAVE A CLEAR PROlLE NON INTERCHANGEABLE
WITH A HIGH QUALITY STANDARD ANDOR REGIONAL IDENTITY
Q (AVE SPECIAL PRODUCT QUALITY STANDARDS BEEN DEVELOPED AND
APPLIED FOR SPECIAL CUSTOMERS
Q !RE THERE POSSIBILITIES FOR DEVELOPING A LABEL OR BRAND OR ANY
OTHER EXCLUSIVE PRODUCT PROGRAMME
Q !RE REGULAR PRODUCT INNOVATIONS MADE
Q (OW MANY DIFFERENT PRODUCTS ARE TO BE PRODUCED AND SOLD TO
BE COST EFlCIENT
CONSUMER GROUPS DO INDEED EXIST WITH REGARD TO EXPECTED PRODUCT

QUALITY AND WILLINGNESS TO PAY 4HERE ARE CONSUMER GROUPS THAT DUE
TO THEIR LIMITED HOUSEHOLD BUDGET LOOK ESPECIALLY FOR CHEAPER PRO
DUCTS WHILE OTHER GROUPS TEND TO BUY PRODUCTS WITH THE HIGHEST
PRICES BECAUSE THEY ALSO BELIEVE THAT THE HIGHEST QUALITY IS REmECTED IN
A HIGH PRICE )N ALL PRODUCT GROUPS THEREFORE BOTH ASSORTMENT LINES
SHOULD BE OFFERED PRODUCTS OF BASIC QUALITY UNDER A RETAILERS TRADE
MARK AND PREMIUM PRODUCTS UNDER A PRODUCER BRAND
0RICING POLICY
THE UNIQUE ROLE &OR MANY FARMERS HIGH PRICES ARE THE MOST IMPORTANT INDICATOR OF
OF PRICES A SUCCESSFULLY OPERATING /-) 4HEREFORE FARMERS PRICES NOT ONLY
HAVE AN ECONOMIC FUNCTION BUT ALSO A PSYCHOLOGICAL AND SOCIOLOGICAL
FUNCTION AS REGARDS THE FARMERS COMMITMENT TO AN /-) 4HIS MEANS
THAT GENERALLY SPEAKING FARMERS ARE MORE INTERESTED IN BEING OR RE
MAINING A MEMBER OF AN /-) IF THE PRODUCT PRICE IS HIGHER THAN FOR
COMPARABLE PRODUCTS OF COMPETITORS

3TART UP PHASE
0RICE ALSO PLAYS A UNIQUE ROLE IN THE CONSUMERS BUYING DECI

SION 7HEN CONSUMERS REJECT ORGANIC FOOD THEY ARGUE THAT THEIR MAIN
BARRIER IS THE RELATIVELY HIGH PRICE LEVEL &OR MANY CONSUMERS THE
PRODUCT PRICE IS THE CENTRAL CLASSIlCATION CRITERIA FOR PRODUCTS BEING
INTERESTING OR UNINTERESTING TO BUY /FTEN CERTAIN PRICE BORDERLINES AS
WELL AS PRICE IMAGE EG WITH ORGANIC PRODUCTS LIMIT THE CONSUMERS
WILLINGNESS TO BUY OR REJECT AN ORGANIC PRODUCT SEE #HAPTER
!CCORDINGLY IF THE SALES PRICE OF A PRODUCT IS WITHIN AN ACCEPTABLE
PRICE RANGE THE PRICE PLAYS A LESS IMPORTANT ROLE IN THE DECISION TO
BUY THAN WHEN THE PRICE IS ABOVE AN ACCEPTABLE LEVEL 2EFERENCE PRICES
FROM FREQUENTLY BOUGHT PRODUCTS STRONGLY INmUENCE PRICE AWARENESS
4HESE PRICE LEVELS ARE COMPLETELY DIFFERENT FROM PRODUCT TO PRODUCT
AND MUST BE TAKEN VERY CAREFULLY INTO ACCOUNT
.OT ONLY CONSUMERS BUT ALSO WHOLESALERS HAVE CERTAIN PRICE

BARRIERS THAT ARE DETERMINED BY THEIR MOST IMPORTANT CUSTOMERS AS
WELL AS BY THE PRICE CONDITIONS OFFERED BY OTHER SUPPLIERS COMPETING
WITH THE /-)
4HE MOST CHALLENGING TASK IS ASCERTAINING WHAT POSSIBILITIES

THERE ARE TO INmUENCE THE PRICES SET BY AN /-) ACTIVITY IN A GIVEN
MARKET ENVIRONMENT 4HIS DEPENDS VERY MUCH ON THE OVERALL STRATEGY
AN /-) HAS CHOSEN
4HE TERM PRICE POLICY IN THIS BOOK COVERS ALL MEASURES WHICH DIRECT
DIRECTLY OR INDIRECTLY INmUENCE THE PRODUCT PRICE $IRECT PRICE POLICY AND INDIRECT
COVERS THE FORMATION OF PRICES THE DElNITION OF THE SUPPLY PRICE AND PRICE POLICY
PRICE FRAMEWORKS AND THE CHANGING AND DIFFERENTIATION OF PRICES
AND REPRESENTS THE MAIN CONTENT OF THE SUB CHAPTER ON PRICE POLICY
)NDIRECT PRICE POLICY IS IMPORTANT IN THE BUSINESS TO BUSINESS MARKET
PARTNERSHIP )T IS IMPORTANT IN TERMS OF ATTRACTING MARKET ACTORS GET
TING THE /-) PRODUCTS LISTED TRANSFERRING PROMOTION ACTIVITIES FROM
THE PRODUCER SIDE TO THE RETAILER SIDE BY OFFERING DISCOUNTS AND ALLOW
ANCES OR LONGER PAYMENT TERMS
0RICE FORMATION IS COMPLEX WITH MANY INmUENCING FACTORS FORMATION

0RICE SETTING DEPENDS ON SEVERAL FACTORS THAT MAY VARY ACCORDING TO OF PRICES
THE PRODUCT SITUATION TIME AND QUALITY /FTEN HOWEVER PRICES ARE
SHAPED BY THE MARKET PARTNERS OR COMPETITORS !N /-) IS GENERALLY

LESS ABLE TO CONTROL PRICE FORMATION THAN TO CONTROL PRODUCT PROMO

TION OR DISTRIBUTION POLICY
&ARM PRICES FOR ORGANIC PRODUCTS SHOULD AS A MINIMUM COVER
THE PRODUCTION COSTS
&URTHERMORE ORGANIC PRODUCT PRICES AT THE FARM GATE LEVEL
DEPEND ON THE GENERAL SUPPLY SITUATION AND ITS DEVELOPMENT THE
DEVELOPMENT OF DEMAND DEVELOPMENT OF COMPETITOR PRICES AND THE
DEVELOPMENT OF THE CONVENTIONAL SECTOR AND ITS PRICES
!N /-) IS IN A BETTER POSITION TO COVER ITS COSTS OF PRODUCTION
WHERE IT HAS CONSIDERABLE MARKET POWER IE A HIGH MARKET SHARE ITS
PRODUCTS ARE MORE EXCLUSIVE AND ITS COMPETITORS HAVE A REDUCED INmU
ENCE ON THE PRICE FORMATION PROCESS )T IS ALSO MORE LIKELY TO ACHIEVE
ITS DESIRED PRICE IN SITUATIONS WHERE THE DEMAND FOR ORGANIC PRODUCTS
THAT THE /-) PRODUCES DEVELOPS FASTER THAN THE SUPPLY
(OWEVER AS SHOWN IN #HAPTER THERE HAS BEEN AN OVERSUPPLY
OF ORGANIC PRODUCTS LIKE MILK AND BEEF IN MANY %UROPEAN COUNTRIES
IN RECENT YEARS 4HIS HAS PUT PRESSURE ON PRODUCER PRICES WITH SOME
PRODUCERS SELLING THEIR ORGANIC PRODUCTS AT CONVENTIONAL PRICES
/NE WAY TO AVOID THIS DIFlCULT SITUATION IS FOR AN /-) TO DIF
FERENTIATE ITSELF FROM OTHER PRODUCTS BY DEVELOPING ITS OWN BRAND OR
PRODUCING NICHE PRODUCTS !LSO AN /-) WHICH TRIES TO CO ORDINATE
AND STEER THE SELLING OF A PRODUCT NATIONWIDE HAS A BETTER CHANCE OF
ACHIEVING RELATIVELY HIGH PRICES BECAUSE ITS MARKET POWER INCREASES
WITH INCREASING MARKET SHARE
'ENERALLY SPEAKING /-)S ARE MORE ABLE TO INmUENCE THE SALES PRICE
Q THE HIGHER THE MARKET SHARE OF AN /-) IS PRICE QUANTITY STRA

TEGY OR
Q THE MORE EXCLUSIVE THE PRODUCTS ARE PREFERENCE STRATEGY
-ANY /-)S ANALYSED IN %UROPE TRY TO ACHIVE HIGHER PRODUCT

ACHIEVING HIGHER PRICES BY SPECIlC EXCLUSIVE QUALITY STRATEGIES (OWEVER THERE ARE ALSO
PRODUCT PRICES SOME /-)S WHICH ARE ABLE TO ACHIEVE AT LEAST QUITE STABLE PRICES BY
BUNDLING LARGER VOLUMES OF PRODUCTS 4HESE /-)S TAKE ON A PRODUCT
POOL FUNCTION AND ARE THEREFORE OFTEN ATTRACTIVE SUPPLIERS FOR PROCES
SORS OR RETAILERS .EVERTHELESS IT MUST BE NOTED THAT LARGER PRODUCT
POOLS CAN COME UNDER TREMENDOUS PRICE PRESSURE IF THERE IS A SUPPLY
SURPLUS IN MARKET CONSTELLATIONS )N THIS INSTANCE /-)S MUST PLACE A

3TART UP PHASE
LARGER SUPPLY IN THE MARKET AS A SINGLE SUPPLIER WITH A RELATIVELY SMALL

PRODUCT VOLUME #ONVERSELY IN SUPPLY SHORTAGE CONSTELLATIONS PRO
DUCT POOLS ARE ABLE TO PULL UP THE PRICE
)N MOST CASES REGARDLESS OF THE CHOSEN DISTRIBUTION CHANNEL PRICING MUST BE

THERE IS A PRODUCT PRICE DIFFERENCE BASED ON WHETHER A PRODUCT CAN BE BASED ON CHOSEN
SOLD VIA A BRAND OR A LABELLING SCHEME OR NOT %ARLY ON AT THE STAGE OF STRATEGIES
DElNING ITS OBJECTIVES AND STRATEGIES AN /-) MUST DECIDE WHETHER IT
WANTS TO ADOPT A MASS PRODUCT OR PREMIUMNICHE PRODUCT STRATEGY
4HE PRICE STRATEGY SHOULD NEVER BE DECIDED UPON WITHOUT REFERENCE
TO GENERAL PRODUCT POSITIONING AS DElNED IN THE OBJECTIVES AND STRA
TEGIES !N /-) THAT PURSUES AN EXCLUSIVE PREMIUM PRODUCT STRATEGY
WOULD PROBABLY LOSE CONSUMER CREDIBILITY IF IT CHOSE TO FOLLOW A PER
MANENT DISCOUNT PRICE STRATEGY AS WELL
4HE PRICE OF A PRODUCT IS CLOSELY LINKED TO AN AWARENESS OF ITS PRICE QUALITY

QUALITY AND VICE VERSA 1UALITY INCLUDES ALL KINDS OF SERVICES WHICH RELATIONSHIPS
CONTRIBUTE TO THE ADDED VALUE OF A PRODUCT SUCH AS A GOOD DELIVERY MUST ALSO IN
SERVICE SALES STAFF EDUCATION USER FRIENDLY INFORMATION EG RECIPES CLUDE ADDITIONAL
ETC #ONSUMER TESTS IN THE 53! HAVE SHOWN THAT IF CONSUMERS ARE SERVICES
AWARE OF LARGE DIFFERENCES IN QUALITY THEY TEND TO BUY THE MORE EXPEN
SIVE PRODUCT )F THEY ARE AWARE OF FEWER QUALITY DIFFERENCES THEY TEND
TO BUY THE CHEAPER PRODUCT )N LESS TRANSPARENT MARKETS CONSUMERS
ALSO TEND TO BE GUIDED BY PRICES WHICH THEY USE AS A KEY ATTRIBUTE FOR
QUALITY 4HIS MEANS THAT QUALITY AWARENESS IS OFTEN CLOSELY DEPENDENT
ON PRODUCT PRICE
&ROM BOTH THE CONSUMERS AND THE RETAILERS PERSPECTIVE HIGHER PRICE PREMIUMS
PRODUCT PRICES ARE ASSOCIATED WITH ADDED VALUE )T IS THEREFORE IMPOR MEAN ADDED
TANT IF A NICHE OR PREMIUM PRICE STRATEGY IS PLANNED THAT AN /-) VALUE FOR THE
DElNES WHICH OF ITS PRODUCTS SPECIlC ATTRIBUTES CAN BE COMMUNI CUSTOMER
CATED AS AN ADDITIONAL BENElT FOR RETAILERS AND CONSUMERS 4HIS CAN
BE THE EMOTIONAL VALUE OF A BRAND THE UNIQUE QUALITY OF A PRODUCT
OR PERFORMANCE OF A SPECIlC SERVICE EG THE EXCITING TASTE OF A SPE
CIlC HERB CHEESE OR THE VERY ANIMAL FRIENDLY HUSBANDRY SYSTEM OF
AN ORGANIC PASTURED BEEF LABEL )T WOULD BE WRONG TO ASSUME THAT
ORGANIC ANDOR REGIONAL ORIGIN WOULD BE RECOGNISED BY THE CONSUMER
AS ADDED VALUE AND THEREFORE AN APPROPRIATE JUSTIlCATION FOR A MUCH
HIGHER PRICE THAN AVERAGE

#ONSUMER STUDIES WITHIN THE /-)A2$ PROJECT SHOW THAT CON

SUMERS EVALUATE THE VALUE OF AN ORGANIC PRODUCT IN DIFFERENT WAYS
3OME PRODUCTS LIKE MILK WHETHER ORGANIC OR CONVENTIONAL HAVE A
VERY POSITIVE IMAGE )N THIS CASE THE WILLINGNESS TO PAY MORE FOR OR
GANIC MILK IS IN MANY CASES LOWER THAN EG FOR ORGANIC VEGETABLES
2ESULTS OF QUALITATIVE CONSUMER SURVEYS WITHIN THE /-)A2$

REDUCE PRICE PROJECT SHOW THAT SOME OCCASIONAL BUYERS OF ORGANIC PRODUCTS
BARRIERS BY BOUGHT AN ORGANIC PRODUCT FOR THE lRST TIME WHEN ITS PRICE WAS
@SPECIAL PRICES REDUCED !N EXPERIMENT CONDUCTED IN $ANISH AND 3WEDISH RETAIL
CHAINS SHOWED THAT REDUCING ORGANIC PRODUCT PRICES FOR EXAMPLE AT
@SPECIAL OFFER PRICES LEADS TO TREMENDOUS GROWTH IN SALES ESPECIALLY
WHEN A NEW PRODUCT GROUP IS INTRODUCED INTO A RETAIL CHAIN OR SHOP
/FTEN CONSUMERS WHO DO NOT USUALLY BUY ORGANIC PRODUCTS BECAUSE
OF HIGHER PRICES CAN BE MOTIVATED TO TRY ORGANIC PRODUCTS 3PECIAL @IN
TRODUCTORY PRICES FOR A LIMITED TIME EG FOR WEEKS MAY ALSO HELP
TO REDUCE BARRIERS IF SUPPORTED BY GOOD PROMOTION
0RICE BARRIERS FOR WHOLESALERS CAN BE REDUCED BY OFFERING SPE
CIAL SALES CONDITIONS EG DELIVERY SERVICE PRICE REDUCTIONS FOR LARGE
QUANTITIES ETC
!LSO RELEVANT TO MARKET SUCCESS IS AN /-)S COMPETITIVENESS IN

COMPETITOR TERMS OF ITS PRODUCT PRICES !N /-) THAT SELLS PRODUCTS DIRECTLY TO
PRICES MUST BE WHOLESALERS RETAILERS OR CONSUMERS MUST TAKE INTO CONSIDERATION THE
TAKEN INTO PRICES OF THE RELEVANT SUBSTITUTION PRODUCTS OFFERED BY THEIR COMPETI
ACCOUNT TORS ESPECIALLY IF THEIR OWN PRODUCTS ARE NOT VERY EXCLUSIVE
-ANY /-)S MUST FOLLOW OR DEVELOP A PRICE DIFFERENTIATION

PRICE VARIA STRATEGY THE LONGER THEY OPERATE DEPENDING ON PRODUCTS CUSTOMER
TION FOR DIFFER GROUPS QUANTITIES SEASONAL ASPECTS AND REGIONS
ENT PRODUCTS 0RICES MAY BE DIFFERENT WHEN PRODUCTS ARE SOLD TO DIFFERENT
CUSTOMER GROUPS CUSTOMERS UNDER DIFFERENT BRANDS IN DIFFERENT REGIONS OR WITHIN
AND REGIONS A PARTICULAR SEASON )T IS IMPORTANT THAT ALL RELEVANT INFORMATION IS
GATHERED TO SET A REALISTIC PRICE THAT IS COMPETITIVE IN DIFFERENT CUS
TOMER REGIONS BUT ALSO COST EFlCIENT AND COMPETITOR ORIENTED
0RODUCT PRICES MUST ALSO BE DIFFERENTIATED WITHIN A PRODUCT
GROUP &OR EXAMPLE A MILK PROCESSOR MIGHT GET A HIGH PRICE FOR SOME
CHEESE SPECIALITIES BUT A LOW PRICE FOR PASTEURISED MILK BECAUSE OF THE
COMPETITIVE SITUATION !N OVERALL CALCULATION IS THEREFORE NECESSARY

3TART UP PHASE
!LSO CONSUMER WILLINGNESS TO PAY FOR ORGANIC PRODUCTS CAN VARY

FROM ONE PRODUCT TO ANOTHER 7HILE CONSUMERS ARE GENERALLY WILLING
TO PAY PRICE PREMIUMS OF UP TO FOR ORGANIC PRODUCTS LIKE FRUIT
VEGETABLES OR GRAIN THEY TYPICALLY ACCEPT PRICE PREMIUMS OF n
FOR ORGANIC MILK OR BEEF
!NOTHER REASON FOR PRICE VARIATION CAN BE INmUENCED BY CLIMAT
IC CONDITIONS FOR EXAMPLE DROUGHT OR EXTRAORDINARILY GOOD GROWING
CONDITIONS THAT LEAD TO A SHORTFALL OR SURPLUS IN SUPPLY DURING A CER
TAIN PERIOD !GAIN IT IS IMPORTANT THAT A TIME LIMITED PRICE CHANGE IS
COMMUNICATED TO CONSUMERS AND OTHER CUSTOMERS
/RGANIC PRICE DEVELOPMENT IS MORE OR LESS DIRECTLY CONNECTED

TO THE PRICE DEVELOPMENT OF COMPARABLE CONVENTIONAL PRODUCTS 4HAT
MEANS THAT EVEN IF THERE IS A SHORTAGE OF ORGANIC PRODUCTS ORGANIC
PRICE PREMIUMS COMPARED TO CONVENTIONAL GOODS CANNOT INCREASE
BEYOND WHAT CONSUMERS ARE WILLING TO PAY (OWEVER THERE IS A DAN STRATEGIC PRICES
GER THAT IN A SITUATION WHERE THERE IS A SURPLUS OF ORGANIC PRODUCTS
SUCH AS MILK ORGANIC PRODUCT PRICES MAY DECREASE EVEN FASTER THAN
CONVENTIONAL PRICES 7HEN PRICES FALL IT IS GENERALLY AN IRREVERSIBLE
PROCESS EVEN WHERE SUPPLY MAY FALL RELATIVE TO DEMAND IN SUBSEQUENT
YEARS 4HEREFORE RATHER THAN ACCEPT A STRAIGHTFORWARD PRICE REDUC
TION IN NEGOTIATION WITH PROCESSORS WHOLESALERS OR RETAILERS /-)S
SHOULD TRY TO OFFER MORE SERVICES EG TASTINGS INFORMATION LEAmETS
OR HIGHER QUANTITIES EG OFFER MORE PRODUCT VOLUME FOR THE
SAME PRICE 4HIS MAKES IT EASIER TO KEEP THE PRICE STABLE IN DIFlCULT
SALES PERIODS
!S SHOWN IN #HAPTER HIGH PRICES FOR ORGANIC PRODUCTS ARE PRICE POLICY
ONE OF THE MAIN BUYING BARRIERS FOR CONSUMERS %VEN WHEN CONSUM AND PROMOTION
ERS ARE INTERESTED IN ORGANIC PRODUCTS THEY OFTEN ARGUE THAT THE FAM POLICY
ILY BUDGET IS NOT SUFlCIENT TO BUY ORGANIC PRODUCTS GENERALLY OR TO
INCREASE THE NUMBER OF ORGANIC PRODUCTS THEY BUY
@3PECIAL PRICES ARE THEREFORE ABLE TO ENCOURAGE CONSUMERS TO
TEST ORGANIC PRODUCTS FOR THE lRST TIME AND TO REDUCE GENERAL BUYING
BARRIERS 4HE RESULTS OF THE /-)A2$ CONSUMER SURVEY IN 3WITZERLAND
REVEALED THAT ESPECIALLY IN THE CASE OF MEAT FRUIT AND VEGETABLES CON
SUMERS STARTED TO BUY THESE PRODUCTS DURING THE @SPECIAL PRICE WEEKS
-ORE IMPORTANTLY THEY CONTINUED TO PURCHASE ORGANIC PRODUCTS AFTER
THE SPECIAL OFFER PERIOD BECAUSE THEY WERE IMPRESSED BY THE EXCELLENT


RIGHT PRICE POLICY
Q $OES THE PRICE POLICY CORRESPOND WITH THE GENERAL MARKETING
STRATEGY
Q #AN THE ORGANIC PRICE PREMIUM BE JUSTIlED WITH AN ADEQUATE
ADDED VALUE
Q !RE THE PRICES COMPETITIVE ON THE MARKET PLACE
Q )S IT POSSIBLE TO EARN AN HIGHER PRICE THAN WITHOUT THE /-) ACTIV
ITY
TASTE 4HERE ARE SEVERAL POSSIBLE WAYS OF OFFERING @SPECIAL PRICES SUCH
AS SIMPLE PRICE DISCOUNTS IN SEASONS WITH A SURPLUS !LTERNATIVELY
ATTEMPTS TO STIMULATE ADDITIONAL PURCHASES COULD INCLUDE OFFERING
LARGER VOLUMES PER PRICE UNIT PROVIDING MONEY OFF FOR THE NEXT PUR
CHASE OR OFFERING CROSS SELLING SPECIAL PRICE ACTIVITIES EG FULL PRICE
TOMATOES WITH HALF PRICE MOZZARELLA
0RICE PROMOTIONS ARE VERY COMMON AND ARE GENERALLY CONSID
ERED TO HAVE SHORT TERM SALES BENElTS 7HEN AN /-) RELEASES NEW
PRODUCTS USE OF SPECIAL PRICES IS RECOMMENDED FOR A DElNED PERIOD
4HIS ATTRACTS THE RETAIL PURCHASERS TO TRY OUT THE NEW PRODUCTS IN AD
DITION TO ATTRACTING THE ATTENTION OF CONSUMERS TO THE NEW PRODUCTS
4HIS IS IMPORTANT BECAUSE CONSUMER BUYING DECISIONS ARE INmUENCED
BY SPECIAL PRICE PRODUCTS
0ROMOTION POLICY
/-)S THAT DO NOT ACTIVELY PROMOTE THEIR PRODUCTS WILL REMAIN GENER
ALLY UNKNOWN AND STRUGGLE TO PERFORM ECONOMICALLY 4HE MYTH THAT
GOOD PRODUCTS SELL THEMSELVES IS UNFORTUNATELY REALLY JUST A MYTH
%VEN IF BUDGETS SPENT ON PROMOTION ACTIVITIES SEEM EXPENSIVE
NO PROMOTION AND WITHOUT DIRECT BENElT FOR MANY FARMERS IT MUST BE EMPHASISED
NO PERCEPTION THAT WITHOUT PROMOTION THE BEST PRODUCT OR SERVICE WILL BE OVER
OF /-) LOOKED IN THE mOOD OF OFFERS WHICH CONSUMERS RECEIVE EVERY DAY FROM
PERFORMANCE COMPETITORS %XAMPLES OF MANY SUCCESSFUL lRMS WITH WELL KNOWN
BRANDS SHOW THAT WITH A LARGE MARKETING BUDGET FOR PROMOTION EVEN
AVERAGE QUALITY PRODUCTS ARE ABLE TO ACQUIRE A CERTAIN UNIQUENESS OR
EVEN MARKET LEADERSHIP

3TART UP PHASE
4HE /-) @!LCE .ERO IN )TALY TRIES TO CONVINCE CONSUMERS BY ADVERTISING vTHE FACES BEHIND
THE PRODUCTSv 0HOTO !LCE .ERO
!BOVE ALL IN MARKETS WHICH ARE ACTUALLY MATURED AND WHERE

DIFlCULTIES EXIST FOR CONSUMERS TO DISTINGUISH ONE BEEF LABELLING
SCHEME FROM ANOTHER THE STORY BEHIND THE PRODUCTS AND THE FREQUEN
CY OF PROMOTION DECIDE WHICH PRODUCTS THE CONSUMER WILL PREFER
4HE SHORT TERM GOAL OF AN /-)S PROMOTION ACTIVITY IS TO

ACHIEVE GREATER SALES BY GAINING A HIGHER DEGREE OF CUSTOMER RECOG
NITION FOR ITS OWN PRODUCTS IN COMPETITION WITH COMPARABLE OFFERS
4HE LONG TERM OBJECTIVE IS TO ACHIEVE CUSTOMER LOYALTY FOR THE /-)S
PRODUCTS AND THE /-) ITSELF
7HAT DO MARKET PARTNERS OR CONSUMERS WANT TO KNOW ABOUT OBJECTIVES OF
AN /-) AND ITS PRODUCTS 4HEY MAINLY WANT INFORMATION ABOUT COMMUNICATION
AN /-)S AVAILABLE PRODUCTS AND ITS PRODUCT ATTRIBUTES AND QUALITY
ASSURANCE PROGRAMME THE ADDED VALUE ABOUT PRODUCT PRICES AND

PRODUCT AVAILABILITY ABOUT SALES PROMOTION ACTIVITIES AS WELL AS THE

/-) ITSELF AND ITS PRODUCTION METHODS
!LL PROMOTION ABOUT AN /-) AND ITS PRODUCTS CREATES A CER
TAIN IMAGE IN CONSUMER EYES WHICH INmUENCES DEMAND !BOVE ALL
CONSUMERS WANT TO KNOW ABOUT THE SPECIlC BENElTS OF THE PRODUCTS
7HY SHOULD THEY BUY THEM !RE THE PRODUCTS TASTIER HEALTHIER
PROCESSED USING AN ANCIENT RECIPE OR DO THEY HAVE A LONGER SHELF LIFE
THAN OTHER PRODUCTS 7HY IS THE SPECIlC /-) PRODUCT BETTER THAN A
COMPETITORS PRODUCT %VEN IF THE SALES PRICE IS HIGHER THAN AVERAGE
CONSUMERS WANT TO KNOW THE REASONS AND THE PERSONAL BENElTS OF
SUCH PRODUCTS
%VEN IF A PRODUCTS ADVANTAGES ARE DIFlCULT TO IDENTIFY A GOOD
STORY BASED AROUND THE PRODUCT CAN HELP TO IMPROVE THE IMAGE OF AN
/-) AND ITS PRODUCTS #ONSUMERS LIKE TO HEAR OR READ STORIES BEHIND
A PRODUCT ABOUT THE REGION ABOUT THE FARMERS AND THEIR WORK ABOUT
THE ANIMALS !LL THIS HELPS TO IMPROVE THE IMAGE IN CONSUMER EYES
$UE CONSIDERATION MUST BE GIVEN TO THE FACT THAT POSITIVE
COMMUNICATION MESSAGES CAN AROUSE CONSUMER INTEREST IN GENERAL
%VEN WITH GOOD PROMOTION HOWEVER THERE IS NO SUBSTITUTE FOR GOOD
QUALITY !T THE LEAST AFTER PURCHASING A PRODUCT FOR THE lRST TIME THE
CONSUMER CRITICALLY ASSESSES THE PRODUCT AND COMPARES IT WITH HISHER
EXPECTATIONS AND PROMOTION PROMISES )F CONSUMERS ARE NOT SATISlED
WITH A PRODUCT THEY WILL NOT BUY IT AGAIN REGARDLESS OF PROMOTION
EFFORTS
3EVERAL METHODS AND INSTRUMENTS EXIST TO COMMUNICATE THE

INSTRUMENTS OF PERFORMANCE OF AN /-) )T MAKES SENSE NOT TO CONCENTRATE ON ONLY
PROMOTION ONE INSTRUMENT $IFFERENT INSTRUMENTS SHOULD BE COMBINED FOR A
PROMOTION MIX THAT ADDRESSES STAKEHOLDERS OPINION LEADERS AND
POTENTIAL CUSTOMER GROUPS WITH DIFFERENT MEDIA TYPES AT DIFFERENT
TIMES
0ROMOTION ACTIVITIES CAN BE ROUGHLY DIVIDED INTO DIRECT AND

INDIRECT ACTIVITIES SEE TABLE

3TART UP PHASE
4ABLE $IRECT MEASURES )NDIRECT MEASURES

SALES PROMOTION AND ADVERTISEMENTS PUBLIC RELATIONS 02
(IGH COST PROMOTION -EDIA ADVERTISING
s 3ALES PROMOTIONS
s -ERCHANDISING
-EDIUM COST PROMOTION s ,EAmETS BROCHURES s 4RADE FAIRS
s 4ELEPHONE SALES s %XHIBITIONS
s $IRECT CONTACT WITH OPINION LEADERS s 0RESS RECEPTIONS
EG TEACHERS NUTRITION ADVISORS s /PEN DAYS
DOCTORS REGIONAL ADVISORS
,OW COST PROMOTION s 0OSTERS s 0RESS RELEASES
s .EWSLETTERS
4ABLE #LASSIlCATION OF PROMOTION INSTRUMENTS AND METHODS
-ANY PROMOTIONAL ACTIVITIES COST A GREAT DEAL OF MONEY (OW

EVER THERE ARE ALSO OPPORTUNITIES TO COMMUNICATE MESSAGES ABOUT AN
/-) AND ITS PRODUCTS WITH SMALL BUDGETS
4HE RIGHT COMPOSITION OF INDIVIDUAL INSTRUMENTS DEPENDS ON

THE BUSINESS AREA THE PRODUCTS THE MESSAGE THE COMPETITION THE
MAIN CUSTOMER GROUPS AND LAST BUT NOT LEAST THE AVAILABLE BUDGET
4HE FOLLOWING PARAGRAPHS DESCRIBE THE MOST RELEVANT AP

PROACHES FOR PROMOTION ACTIVITIES
0UBLIC RELATIONS ACTIVITIES ARE THE CHEAPEST FORM OF PROMOTION PUBLIC RELATIONS
-ANY FARMERS AND /-)S USE PUBLIC RELATIONS ACTIVITIES SUCH AS FARM
PARTIES OR OPEN DAYS TO MAKE THEIR FARMS AND PRODUCTS WELL KNOWN
"ESIDES INFORMING EXISTING AND POTENTIAL CUSTOMERS IT IS IMPORTANT
TO INTEREST LOCAL JOURNALISTS TO WRITE ARTICLES IN NEWSPAPERS )T MUST BE
BORNE IN MIND THAT AFTER THE SECOND GENERAL ARTICLE ABOUT AN /-) IT
IS DIFlCULT TO lND NEW INFORMATION 3PECIAL PRODUCT INNOVATIONS OR
SERVICES MIGHT ATTRACT ATTENTION AT A LATER STAGE OF AN /-)S DEVELOP
MENT
4HE MAIN OBJECTIVE OF ANY PUBLIC RELATIONS ACTIVITY SHOULD BE TO
ENHANCE PUBLICITY AND TO IMPROVE AN /-)S IMAGE 4HE /-) ITSELF
SHOULD BE HIGHLIGHTED AND NOT THE PRODUCTS AS IN ADVERTISEMENTS
4HESE ACTIVITIES SAVE A LOT OF MONEY IN COMPARISON TO ADVERTISING

@+´SKCHE )SNY 'ERMANY

4HE +´SKCHE )SNY IS AN EXAMPLE OF CO OPERATION BETWEEN A DAIRY
AND EIGHT FARMERS 4HIS /-) WAS FOUNDED IN BY THE MANAGER OF
THE DAIRY AND ONE FARMER
!S REGARDS MARKETING THE /-) WORKS WITH AN ACTIVE COMMUNICATION
POLICY 4HE DAIRY IS PRESENTED AS A KIND OF EXHIBITION DAIRY MAKING
THE WHOLE PRODUCTION PROCESS TRANSPARENT !FTER A SHORT THEORETICAL
INTRODUCTION ABOUT THE PRODUCTION OF CHEESE CONSUMERS CAN SEE HOW
THE PREMIUM DAIRY PRODUCTS ARE PRODUCED 7ITHIN ITS CHEESE PRODUC
TION THE /-) ALSO PRODUCES CURD CHEESE YOGURT AND BUTTER 4HERE IS
A LITTLE SHOP IN WHICH THE /-) SELLS ITS OWN DAIRY PRODUCTS AND OTHER
PURCHASED ORGANIC PRODUCTS LIKE EGGS FRUIT AND VEGETABLES BREAD ETC
4HE SHOP IS OPEN DURING THE WEEK AND ALSO ON 3ATURDAYS AND 3UN
DAYS 4HE PREMIUM PRODUCTS THE BUSINESS HOURS AND THE EXHIBITION
DAIRY MAKE THE @+´SKCHE )SNY A POPULAR VISITOR ATTRACTION FOR TOURISTS
4HE DAIRY IS ALSO A lXED STOP FOR COACH TOURS THROUGHOUT THE AREA 4HE
MANAGER OF THE DAIRY MAKES A POSITIVE APPEARANCE IN THE PRESS AND
MEDIA AS OFTEN AS POSSIBLE WHICH MEANS @LOW BUDGET ADVERTISING
FOR THE /-) )N THE /-) WON lRST PRIZE IN A .!"5 COMPETITION
.ATURSCHUTZBUND $EUTSCHLAND E6 n 'ERMAN NATURE CONSERVATION
ORGANISATION %NTERING THE COMPETITION WAS VERY BENElCIAL FOR THE
/-)S NAME BECAUSE MANY ARTICLES ON THE COMPETITION WERE PUB
LISHED NATIONWIDE IN NEWSPAPERS JOURNALS AND THROUGH THE INTERNET
ACTIVITIES AND CONNECT THE /-) MORE CLOSELY WITH REGIONALLOCAL

NETWORKS
0UBLIC RELATIONS ACTIVITIES SHOULD ALSO INCLUDE RELEVANT STAKE
HOLDERS AND OPINION LEADERS !N INVITATION TO MARKET PARTNERS OR
EVEN TO THE SALES STAFF OF A RETAIL CHAIN FOR EXAMPLE EVERY SECOND OR
THIRD YEAR MIGHT BE VERY USEFUL AND CONTRIBUTE TO A BETTER COMMON
UNDERSTANDING !LSO DIRECT CONTACT WITH TEACHERS NUTRITION CONSUL
TANTS OWNERS OF NATURAL AND HEALTH FOOD SHOPS OR DOCTORS CAN BE
HELPFUL 4HESE PEOPLE ARE ABLE TO PASS ON INFORMATION ABOUT THE /-)
TO THEIR PUPILS AND CLIENTS
)N THE START UP PHASE OF AN /-) PUBLIC RELATIONS MEASURES ARE
PARTICULARLY IMPORTANT IN RAISING THE /-)S PROlLE WITHIN AND OUT

3TART UP PHASE
SIDE THE REGION 4HE MORE NEW ELEMENTS PRODUCTS OR SPECIlC STORIES
CAN BE REPORTED ABOUT THE /-) THE MORE PUBLIC ATTENTION THE /-)
WILL HAVE
!N INCREASINGLY IMPORTANT PART OF PUBLIC RELATIONS CONCERNS
CRISIS COMMUNICATION 3EVERAL FOOD SCANDALS IN THE ORGANIC AND
CONVENTIONAL SECTORS IN THE LAST FEW YEARS HAVE HIGHLIGHTED THE IM
PORTANCE OF HAVING ANSWERS READY TO ALL CRITICAL PUBLIC QUESTIONS )N
THE EVENT OF A CRISIS QUICK RESPONSES ARE CRUCIAL IN ORDER TO MAINTAIN
THE TRUST OF THE /-)S CUSTOMERS AND CONSUMERS IN ITS PRODUCTS %VEN
IF AN /-) IS NOT THE ACTUAL SOURCE OF A SCANDAL OR A CRISIS IT SHOULD
BE ABLE TO RESPOND TO PUBLIC OR CUSTOMER QUESTIONS )N PARTICULAR IT
SHOULD BE ABLE TO EXPLAIN WHETHER IT IS AFFECTED BY THE SCANDAL AND
WHETHER IT USES CRITICAL FOODSTUFFS OR COMPONENTS ETC
4HE MAIN TASKS OF PAID ADVERTISING ARE TO MAKE THE PRODUCTS

WELL KNOWN AND GIVE THEM A POSITIVE IMAGE IN THE EYES OF CONSUMERS
7HEN AN /-) IS IN THE SECOND PHASE OF ITS DEVELOPMENT ADVERTIS
ING MEASURES ARE OFTEN MORE EFFECTIVE THAN PUBLIC RELATIONS MEASURES ADVERTISING
BECAUSE THE /-) HAS BEEN AWAY FROM THE PUBLIC EYE FOR A WHILE !T
THIS STAGE IT IS MORE DIFlCULT TO CONVINCE REGIONAL MEDIA TO REPORT
POSITIVE NEWS ABOUT THE /-) OR TO PUBLICISE ANY NEW PRODUCTS OR
SERVICES THE /-) MAY PROVIDE
4HE EFFECTIVENESS OF PUBLIC RELATIONS MEASURES STRONGLY DEPENDS
ON FACTORS OUTSIDE OF THE /-) 7ITH ADVERTISEMENTS HOWEVER THE
/-) HAS MORE CONTROL OVER THE IMAGE THAT IS PORTRAYED
/-)S WHICH DECIDE TO ACTIVELY INVEST IN ADVERTISING SHOULD lRST
CONSIDER HOW MUCH MONEY THEY ARE WILLING AND ABLE TO SPEND ON IT
4HE COSTS INVOLVED IN PLACING ADVERTISEMENTS IN THE MEDIA AS WELL AS
THE COSTS OF MEDIA AGENCIES WHICH TRANSFORM IDEAS AND MESSAGES INTO
AN ADVERTISEMENT MUST BE CONSIDERED
4HE MORE CONSUMERS AN ADVERTISEMENT REACHES THE HIGHER THE
EXPENDITURE -EDIA TYPES SUCH AS 46 AND RADIO REACH MILLIONS OF
CONSUMERS BUT THEY ALSO COST A GREAT DEAL OF MONEY IN COMPARISON
WITH MAGAZINE ADVERTISEMENTS #HEAPER STILL ARE ADVERTISEMENTS IN
REGIONAL NEWSPAPERS OR BULK MAIL ADVERTISEMENTS $UE TO THEIR LIM
ITED MARKETING BUDGETS AND OFTEN REGIONALLY FOCUSSED SALES ACTIVITIES
/-)S TEND TO USE NEWSPAPERS MORE FREQUENTLY
)T IS IMPORTANT THAT ADVERTISEMENTS CONTAIN CLEAR MESSAGES
4HESE MESSAGES SHOULD REmECT THE SPECIlCS OF THE PRODUCTS 4HEY

SHOULD BE DESIGNED IN A WAY THAT IS APPROPRIATE TO THE MAIN TARGET

GROUP OF CUSTOMERS &OR EXAMPLE FOR YOUNG CONSUMER GROUPS THE
USE OF LANGUAGE WILL BE DIFFERENT FROM THAT USED FOR OLDER CONSUMER
GROUPS
!NOTHER VERY EFlCIENT WAY TO COMMUNICATE IS TO USE SYNERGIES
BY CO OPERATING AND NETWORKING WITH OTHER SECTOR ACTIVITIES IN A RE
GION /-) PRODUCERS COULD PLACE ADVERTISEMENTS IN TOURISM LEAmETS
OR CARRY OUT PERSONAL SELLING ACTIVITIES DURING LOCAL FAIRS OR EVENTS
! GOOD NETWORK WITH REGIONAL ACTORS CAN BE VERY HELPFUL IN TERMS
OF lNDING PARTNERS OUTSIDE AGRICULTURE FOR COMMON ADVERTISEMENTS
CAMPAIGNS
%FFECTIVE COMMUNICATION DEPENDS ON TRANSMITTING A CLEAR AND

INFORMATIVE MESSAGE 4HE MESSAGE MUST COMMUNICATE WHAT IS ESSEN
TIALLY DIFFERENT ABOUT A PRODUCT AND THE PARTICULAR BENElTS THE CON
SUMER WILL DERIVE BY PURCHASING IT n THE UNIQUE SELLING PROPOSITION
530 4HIS SHOULD BE ACHIEVED EFlCIENTLY IN A VERY SHORT TIME DUE TO
THE EXPENSE INVOLVED IN PAID MEDIA USE
,AST BUT NOT LEAST WORD OF MOUTH ADVERTISING SHOULD BE MEN

TIONED 4HE EXPERIENCE OF CONSUMERS WHO BUY ORGANIC PRODUCTS
SHOWS THAT THE MAJORITY STARTED BUYING ORGANIC PRODUCTS FOLLOWING
A RECOMMENDATION FROM FAMILY FRIENDS OR COLLEAGUES 4HIS PROCESS
CAN BE STIMULATED FOR INSTANCE BY ADVERTISING GIFTS WHEN CUSTOMERS
CONVINCE NEW CONSUMERS TO BUY /-) PRODUCTS !LSO CUSTOMER MAGA
ZINES MAY PROVIDE INFORMATION ABOUT THE ADDED VALUE CHARACTER OF
/-)S PRODUCTS OR INTERESTING STORIES ABOUT THE /-)S BEHIND
2ETAIL COMPANIES LIKE /-) SALES PROMOTION ACTIVITIES BECAUSE

SALES PROMOTION THEY TEND TO BE FREE OF CHARGE FOR THEM AND LEAD TO HIGHER SALES OF
THE PROMOTED PRODUCTS IN THE SHORT TO MEDIUM TERM 4HESE ACTIVITIES
MIGHT BE COMBINED WITH A PRODUCT TASTE PREFERENCE TEST 4ASTE PRE
FERENCE TESTS HELP IMPROVE PRODUCT PERCEPTION BY CONSUMERS 4HEY
OFTEN ENCOURAGE CONSUMERS TO TEST A NEW PRODUCT FOR THE lRST TIME
ABOVE ALL WHEN THE PRODUCT PRICE IS POSITIONED AT A PREMIUM LEVEL
#ONSUMER SURVEYS DURING THE /-)A2$ PROJECT SHOW FOR INSTANCE
THAT SOME CONSUMERS WHO WERE BUYING ORGANIC PRODUCTS FOR THE lRST
TIME WERE MOTIVATED BY THE QUALITY OF THE PRODUCT AFTER A CONVINCING
TASTE PREFERENCE TEST

3TART UP PHASE
.APFMILCH@ 3WITZERLAND
0RODUCT SALES PROMOTION IN SUPERMARKETS WITH FARMERS PRESENT
7HEN .APFMILCH A SMALL DAIRY PROCESSING INITIATIVE IN THE CENTRAL
3WISS !LPS THAT MAKES A VARIETY OF FRESH HERB CHEESES WAS FOUNDED
ALL FARMER MEMBERS HAD TO AGREE TO GO ONE DAY PER YEAR TO A SU
PERMARKET STORE 4HEIR TASK WAS TO OFFER SAMPLES OF THEIR FRESH HERB
CHEESE TO CONSUMERS TO TASTE AND TO TELL THEM ABOUT THE PROJECT AND
THEIR FARMS !LTHOUGH AT lRST SOME FARMERS DID NOT WANT TO PARTICIPATE
THEY LEARNED TO SPEAK WITH CONSUMERS AND WERE HAPPY AFTERWARDS
THAT THEY HAD BEEN PUSHED TO ENGAGE IN THIS SORT OF PROMOTION 4HEIR
PRESENCE WAS WELL ACCEPTED BY CONSUMERS 4HEY HELPED TO SELL MANY
MORE OF THEIR PRODUCTS COMPARED TO PROFESSIONAL SALES PROMOTION
STAFF 4HE TWO MAIN SUPERMARKET CHAINS IN 3WITZERLAND STILL CONTINUE
TO RUN THIS TYPE OF PROMOTION OF .APFMILCH PRODUCTS
)F FARMERS ARE TO ENGAGE IN DIRECT FACE TO FACE PROMOTION AT

THE POINT OF SALE IT IS IMPORTANT THAT THEY CAN TALK ACTIVELY ARE OPEN
MINDED AND PRESENT THEMSELVES IN A POSITIVE WAY 4HIS ENCOURAGES
THE CONSUMER TO COMMUNICATE WITH THE FARMER 4HE MORE CHARMING
A PROMOTION PERSON APPEARS THE MORE ATTENTION WILL BE PAID TO THE
PROMOTION ACTIVITY
)N SEVERAL %UROPEAN COUNTRIES IT IS POSSIBLE TO OBTAIN SOME
PUBLIC FUNDING FOR SALES PROMOTION ACTIVITIES FOR EXAMPLE FOR PRINT
MATERIALS WHEN SELLING PRODUCTS AT FAIRS
!LTHOUGH MANY SMALL /-)S HAVE QUITE SMALL BUDGETS IT WOULD EFFECTIVE
BE WRONG TO NEGLECT PROMOTION %VEN WITH A SMALL BUDGET ALL TYPES PROMOTION WITH
OF PUBLIC RELATIONS SHOULD BE USED IN ORDER TO ANCHOR AN /-) IN LIMITED BUDGETS
THE MIND OF RELEVANT STAKEHOLDERS AND CUSTOMERS GROUPS %ACH NEW
PRODUCT AND NEW MILESTONE IN AN /-)S DEVELOPMENT SHOULD BE USED
TO GENERATE A STORY WHICH CAN BE PUBLISHED IN LOCAL OR REGIONAL NEWS
PAPERS !T LEAST ONCE A YEAR A MEDIA CONFERENCE SHOULD INFORM THE
LOCALREGIONAL MEDIA OUTLETS ON THE LATEST NEWS CONCERNING AN /-)
AND ITS DEVELOPMENT .ORMALLY MEDIA REPRESENTATIVES ARE KEEN TO
OBTAIN INFORMATION ABOUT REGIONAL ACTORS AT LEAST WHEN MESSAGES ARE
CONTAINED IN INTERESTING STORIES

0ERSONAL SALES PROMOTION ACTIVITIES CAN GENERALLY BE ORGANISED

BY THE /-) ITSELF AND FOR THE MOST PART REQUIRE ONLY THE LABOUR INPUT
OF /-) MEMBERS
!LL THESE ACTIVITIES MAY NOT LEAD TO A VERY HIGH LEVEL OF PUBLICITY
AND KNOWLEDGE FOR CONSUMERS (OWEVER THESE ARE SUITABLE AND EF
lCIENT MEASURES FOR INFORMING AND CONVINCING PEOPLE OF THE /-)S
PERFORMANCE ,AST BUT NOT LEAST SALES PROMOTION ACTIVITIES ARE AN AP
PROPRIATE WAY TO ENTER INTO DIRECT CONTACT WITH CONSUMERS TO INFORM
AND CONVINCE THEM BUT ALSO TO OBTAIN FEEDBACK ABOUT PRODUCTS

RIGHT COMMUNICATION POLICY
Q !RE THE EFFORTS FOR THE COMMUNICATION ADAPTED TO THE REQUIRE
MENTS OF THE CHOSEN SALES CHANNELS
Q $OES THE BUDGET FOR COMMUNICATION CORRESPOND WITH THE AVAIL
ABLE RESOURCES AND WITH THE EXPECTED SALES
Q !RE THE MEDIA CHOSEN ADAPTED TO THE TARGET CUSTOMER
GROUPS
Q $OES THE /-) REGULARLY INFORM THE MOST RELEVANT AND APPRO
PRIATE MEDIA ABOUT THE LATEST DEVELOPMENTS AND NEW PRODUCT
RELEASES
Q )S IT POSSIBLE TO USE EXISTING IMAGE POTENTIALS IN THE COMMUNI
CATION EG REGIONAL ORIGIN ETC
Q )S THE INTERNAL COMMUNICATION WITH /-) MEMBERS SUFlCIENTLY
TAKEN INTO ACCOUNT
/RGANISATIONAL STRUCTURES AND MANAGEMENT PLANNING

&ROM THE BEGINNING THE SUCCESS OF A MARKETING INITIATIVE DEPENDS
NOT ONLY ON MARKETING MEASURES BUT ALSO VERY MUCH ON MANAGEMENT
PLANNING SEE #HAPTER 4HE CHALLENGE IS TO lND AN ORGANISATIONAL
STRUCTURE THAT IS EFlCIENT AND APPROPRIATE IN TERMS OF IMPLEMENTING
THE STRATEGIC AND OPERATIONAL OBJECTIVES OF AN /-) )T SHOULD ALSO AL
LOCATE THE NECESSARY HUMAN AND lNANCIAL RESOURCES 4HE ADVANTAGE IS
THAT IN THE START UP PHASE /-)S ARE RATHER SMALL ORGANISATIONS THAT
DO NOT NEED COMPLICATED STRUCTURES

3TART UP PHASE
!LTHOUGH THERE IS NO ONE IDEAL ORGANISATIONAL STRUCTURE IT IS

POSSIBLE IN SMALL AND MEDIUM ENTERPRISES IN PARTICULAR TO BUILD SUITABLE
THE MOST SUITABLE AND OPTIMAL STRUCTURE )N MOST CASES ONE PERSON ORGANISATIONAL
OR A VERY SMALL GROUP SHOW STRONG LEADERSHIP CAPABILITIES AND FORM STRUCTURE
A BOARD TO DEVELOP THE EMBRYONIC INITIATIVE 4HESE PEOPLE ARE HIGHLY
MOTIVATED AND HAVE A STRONG VISION BUT ARE OFTEN LACKING IN THE NEC
ESSARY PROFESSIONAL SKILLS MARKETING MANAGEMENT TO RUN SUCH A
BUSINESS ,EARNING BY DOING MAY BE VERY CHALLENGING PERSONALLY BUT
IT CAN BE ALSO VERY COSTLY AND RISKY FOR AN /-) )T IS STRONGLY RECOM
MENDED TO PROMPTLY ACQUIRE IN ONE WAY OR ANOTHER THE NECESSARY
SKILLS THAT ARE LACKING 4HIS MEANS LEARNING TRAINING AND RECRUITMENT
SUBCONTRACTING OR MAKING ALLIANCES
-OST /-)S START WITH A "OARD OF $IRECTORS OF THE ORGANISATION
WHICH THEN DECIDES TO HIRE A FULL OR PART TIME GENERAL MANAGER AND
IN THE CASE OF LARGER INITIATIVES SOME STAFF 4HE BOARD IN THE CASE OF
SMALL /-)S MUST TAKE OVER SOME MANAGEMENT FUNCTIONS OR AT LEAST
BE RESPONSIBLE FOR SPECIlC TASKS SEE BELOW
4HE ORGANISATIONAL WORKING STRUCTURE SHOULD IDEALLY BE DE
SIGNED AFTER THE LEADERINITIATOR ANDOR THE BOARD OF THE INITIATIVE
HAVE DECIDED THE LONG TERM STRATEGY 4HIS DETERMINES WHAT KIND OF
HUMAN RESOURCES AND SKILLS ARE NECESSARY
)T IS ALSO IMPORTANT IN THE START UP PHASE THAT THE STRUCTURE OF
AN ORGANISATION IS DESIGNED IN SUCH A WAY THAT IT CAN EVOLVE AND GROW
IN THE FUTURE 4HEREFORE INSTEAD OF AN ORGANISATION MODEL CHART
#HECKLIST FOR THE DESIGN OF ORGANISATIONAL STRUCTURES

1UESTION 9ES .O 2EMARKS
)S RESPONSIBILITY CLARIlED 7HO ASSUMES THE LEADERSHIP ROLE AND
WHO SUPPORTS
$OES THE STRUCTURE FACILITATE THE DECISION MAKING PROCESS 7HO
DECIDES WHAT AND WHEN
!RE TASKS CLARIlED 7HO IS SUPPOSED TO DO WHAT BY WHEN AND
WITH WHOM
!RE THE RESPONSIBILITIES FOR INTERNAL COMMUNICATION CLEAR 7HO IS
SUPPOSED TO INFORM WHOM AND WHEN
)S THE MOTIVATION OF THE STAFF KEPT HIGH 7HO IS RESPONSIBLE FOR THE
STAFF AND ENTERPRISE CULTURE
$OES THE ORGANISATION FACILITATE CONTROL 7HO IS RESPONSIBLE

SOME CRITERIA ARE GIVEN WHICH CAN HELP TO OPTIMISE THE DESIGN OF A
DYNAMIC ORGANISATIONAL STRUCTURE
-ANY EXISTING /-)S HAVE HAD PROBLEMS COMING UP WITH AN

EFlCIENT DECISION MAKING STRUCTURE 3OME HAVE EVEN CHANGED THEIR
EFlCIENT STATUTES CHANGING FROM A MORE CO OPERATIVE TYPE OF ORGANISATION TO A
DECISION MAKING @CLASSICAL FORM OF LIMITED COMPANY 4HERE ARE CO OPERATIVES HOWEVER
STRUCTURES VERSUS THAT STILL OPERATE VERY EFlCIENTLY 7HAT CAN BE LEARNT 4HE AUTHORS
DEMOCRATIC BELIEVE THAT THE LEGAL STRUCTURE IS NOT THE MAIN POINT )T IS MUCH MORE
ORGANISATION IMPORTANT THAT RESPONSIBILITIES ON EACH LEVEL ARE CLARIlED AND CLEARLY
ASSIGNED SEE TABLE
4ABLE
-EMBER GROUPS OF AN /-) AND THEIR RECOMMENDED SPECIlC RESPONSIBILITY AREAS
-EMBER GROUPS OF AN /-) 2ESPONSIBILITY AREAS
-ISSION STRATEGIC OBJECTIVES DEVELOPMENT OF WORKING
"OARD OF $IRECTORS GUIDELINESCODE OF CONDUCT CONTROLLING INVESTMENTS
LEADING SPECIlC TASK FORCE WORKING GROUPS
0RESIDENT 3UPPORT OF MANAGER CONTROLLING NETWORKING
/PERATIONAL OBJECTIVES AND IMPLEMENTATION OF MARKETING
-ANAGER
PLAN GENERAL MANAGEMENT lNANCES
2ESPONSIBLE STAFF MEMBERS 3PECIlC TASKS FORMULATED IN AN UPDATED JOB DESCRIPTION
"UDGET ELECTION OF BOARD STRATEGIC ORIENTATION GUIDING
'ENERAL MEETING OF MEMBERS
PRINCIPLES
4HE KEY TO GIVING /-) MEMBERS A FEELING OF PARTICIPATORY

INVOLVEMENT IS CONTINUOUS INTERNAL COMMUNICATION 4HIS IS EVEN
MORE IMPORTANT AFTER SOME YEARS OF FUNCTIONING )T IS NOT ENOUGH
JUST TO WRITE AN ANNUAL REPORT AT A GENERAL MEETING IF AN /-) WANTS
TO MAINTAIN A COHERENT RELATIONSHIP WITH ITS MEMBERSHIP ! SIMPLE
NEWSLETTER FOR PRODUCERS AT LEAST TIMES A YEAR CAN BE HELPFUL
/FTEN BUT NOT IN ALL CASES KEY PEOPLE ARE ALSO THE MANAGERS OF
THE MEANING OF AN /-) "UT WHAT DOES MANAGEMENT ACTUALLY MEAN -ANAGEMENT
MANAGEMENT IS TRADITIONALLY DIVIDED INTO FOUR PHASES PLANNING ORGANISATION
REALISATION AND THE EVALUATION OF OBJECTIVES AND STRATEGIES )N THE
CONTEXT OF AN /-) THE MAIN MANAGEMENT TARGETS ARE TO ALLOCATE

3TART UP PHASE
@2£SSLERHOF %RZEUGERGEMEINSCHAFT !LLG´U n /BERSCHWABEN

'ERMANY
-ANAGEMENT BY THE OWNER AND INITIATOR
4HE 2£SSLERHOF WAS FOUNDED IN BY ORGANIC DAIRY FARMERS WITH
THE INTENTION OF OBTAINING A PREMIUM PRICE FOR ORGANIC MILK 4HE /-)
NOW COMPRISES A SMALL DAIRY AND ORGANIC FARMERS 4HE MANAGER OF
THE /-) IS THE OWNER OF THE 2£SSLERHOF AN ORGANIC FARM WITH ITS OWN
FARM SHOP /NLY THE FOUNDER AND THE MANAGER OF THE DAIRY ARE MEM
BERS OF THE /-) THE OTHER SEVEN FARMERS ARE JUST SUPPLIERS 4HE THREE
DIFFERENT CHEESE PRODUCTS ARE SOLD MAINLY THROUGH A LOCAL ORGANIC
CHEESE SELLING ORGANISATION TO WHOLESALERS AND A SMALL PART IS SOLD
LOCALLY 4HERE ARE POSSIBILITIES FOR SELLING DIRECTLY IN COMBINATION WITH
GUIDED TOURS FOR TOURISTS AND VISITORS 4HE PART TIME MANAGER KNOWS
HOW TO HANDLE SUPPLIERS AND CUSTOMERS AND CAN THEREFORE SATISFY
BOTH SIDES (E HAS CARRIED OUT THE MANAGEMENT AND NETWORKING JOB
WITH SUCH COMMITMENT THAT THE TURNOVER OF THE /-) GREW BY AROUND
BETWEEN AND
AND OPTIMISE SHORT FACTORS OF TIME AND COST CAPACITIES TO MAINTAIN

CONTACT WITH MARKET PARTNERS AND PRINCIPAL STAKEHOLDERS BOTH INSIDE
AND OUTSIDE THE REGION AND TO ENSURE THE SUCCESSFUL IMPLEMENTATION
OF OBJECTIVES AND STRATEGIES WITHIN AN /-)
3EVERAL STUDIES CONDUCTED IN NON AGRICULTURAL SECTORS INDICATE

THAT SUCCESS AS WELL AS FAILURE ARE CLOSELY CONNECTED TO THE PERSONAL
SKILLS OF THE MANAGERS 4HIS IS MUCH MORE RELEVANT THAN THE POLITI
CAL MARKET AND COMPETITOR ENVIRONMENT SEE ALSO #HAPTER
&IRSTLY A DECISION NEEDS TO BE MADE ABOUT HOW MANY PEOPLE

AND WHO SPECIlCALLY SHOULD LEAD THE /-) AN INDIVIDUAL PERSON OR (OW SHOULD
AN EXECUTIVE BOARD )T IS RECOMMENDED THAT RESPONSIBILITY FOR MA AN /-)S
KING KEY DECISIONS SHOULD REST WITH MORE THAN ONE PERSON 4HE MORE MANAGEMENT
PEOPLE ARE PERSUADED TO BECOME MEMBERS OF THE EXECUTIVE BOARD THE BE STRUCTURED
GREATER THE DIVERSITY OF EXTERNAL VIEWS AND COMPETENCES INmUENCING
THE /-) 4HE QUESTION OF STRUCTURING AND DEVELOPING MANAGEMENT
MUST BE CLARIlED IN THE PRE START PHASE OF AN /-) PROJECT

@*UVAN ,UOMU &INLAND

3TRATEGIC ALLIANCE WITH A LARGE MARKET PLAYER
*UVAN ,UOMU IS A SMALL DAIRY WITH FARMERS PRODUCING ORGANIC MILK
4HE DAIRY HAS SIX FULL TIME EMPLOYEES 4HE COMPANYS OWN RESOURCES
ARE LIMITED 4O SECURE POSSIBILITIES FOR POSITIVE DEVELOPMENT AND PROF
ITABILITY THE COMPANY FORMED A STRATEGIC ALLIANCE WITH THE NATIONAL
DAIRY COMPANY RIGHT FROM THE BEGINNING 4HE PARTNER HANDLES ABOUT
OF THE TOTAL NATIONALLY PRODUCED MILK IT HAS MORE THAN
MILK PRODUCERS AND ALMOST PERSONNEL )N THIS STRATEGIC ALLIANCE
MODEL THESE TWO COMPANIES HAVE FOUND A WAY OF CO OPERATING IN
WHICH THE COMBINATION OF SKILLS SERVES ORGANIC MILK PRODUCERS AND
THE OBJECTIVES OF COMPANIES AND CONSUMERS 4HE PARTNERS 2$
MARKETING AND INFORMATION SYSTEMS ARE LINKED TO THE PRODUCTION
MANAGEMENT SYSTEMS OF THE COMPANY 4HE MANAGER OF *UVAN ,UOMU
TAKES CARE OF RELATIONSHIPS BETWEEN FARMERS AND THE PARTNER !S ONE
RESULT OF BUSINESS DEVELOPMENT THEIR PRODUCTS ARE WELL KNOWN AND
HAVE A HIGH QUALITY 4HE ALLIANCE HAS BEEN SEEN AS THE ONLY OPTION FOR
THE COMPANY TO GET ITS PRODUCTS INTO ALL POSSIBLE STORES NATIONWIDE
EFFECTIVELY ENOUGH /F COURSE THIS GIVES A GREAT DEAL OF POWER TO THE
PARTNER AND COULD BE A STRATEGIC RISK IN DIFFERENT MARKET CONDITIONS
&URTHERMORE AS ALREADY MENTIONED IN TABLE FOR TARGET ORIEN

CLEAR TED CO OPERATION WITHIN AN /-) THE RESPONSIBILITIES AND COMPETEN
MANAGEMENT CIES OF MEMBERS OF THE MANAGEMENT TEAM AND OTHER /-) MEMBERS
STRUCTURES FROM AND PARTNERS MUST BE CLEARLY DElNED 4HE EARLIER THE MANAGEMENT
THE BEGINNING STRUCTURE IS DEVELOPED THE EASIER AND MORE TRANSPARENT THE MANAGE
MENT OF /-) MEMBERS WILL BE 4HIS FACILITATES EXTERNAL COMMUNICA
TION )T SHOULD BE CLEAR FROM THE BEGINNING WHO IS THE CONTACT PERSON
FOR ANY QUESTION REGARDING PRACTICAL ORGANISATIONAL AND LEGAL ASPECTS
OF THE CO OPERATIVE VENTURE
2ESPONSIBILITY FOR CENTRAL MANAGEMENT MAY BE ASSUMED EITHER

BY AN EXTERNAL PERSON OR BY AN INTERNAL PERSON WHERE FREE RESOURCES
OF /-) MEMBERS ARE AVAILABLE 'ENERALLY SPEAKING IT IS RECOMMEN

3TART UP PHASE
DED THAT AN EXTERNAL EMPLOYED PERSON TAKE ON THE ROLE OF MANAGER IN

ORDER TO MAINTAIN NEUTRALITY IN RELATION TO /-) MEMBERS 4HE MORE INTERNAL AND
THE MANAGER KNOWS THE EXPECTATIONS OF THE PROCESSORS WHOLESALERS EXTERNAL
AND RETAILERS THE BETTER ACCEPTED HESHE WILL BE BY MARKET PARTNERS AS MANAGEMENT
A COMPETENT REPRESENTATIVE OF THE /-)
#LOSE PERSONAL RELATIONS AND CONTACT BETWEEN THE MANAGEMENT

BOARD OF DIRECTORS AND /-) MEMBERS MUST BE DEVELOPED FROM THE
START )T IS IMPORTANT THAT /-) MEMBERS AND PARTNERS FOLLOW THE
SAME MAIN OBJECTIVES AND SHARE MUTUAL SOLIDARITY EVEN IF THEY DO NOT
NECESSARILY SHARE THE SAME VIEWPOINT ABOUT EACH IDEA 4HE OPPORTU
NISTIC BEHAVIOUR OF SINGLE MEMBERS OR PARTNERS COULD LEAD TO PERMA
NENT CONmICTS BETWEEN MEMBERS AND PARTNERS AND AS A CONSEQUENCE
COULD RESULT IN A SEVERE CRISIS OR FAILURE OF THE /-) 4HEREFORE MAN
AGEMENT SHOULD PROMPTLY PREPARE PLANS FOR CONmICT MANAGEMENT
WITH THE HELP OF INDIVIDUAL PARTNERS OR /-) MEMBERS
)T MAY BE HELPFUL TO DEVELOP AN @ENTERPRISE CULTURE WITHIN AN A #ODE OF

/-) FORMULATED AS A @#ODE OF #ONDUCT FOR EXAMPLE WHICH COULD #ONDUCT AS A
BE BASED ON THE FOLLOWING PRINCIPLES MANAGEMENT
TOOL
Q 4HE ENTIRE /-) NOT THE INDIVIDUAL FARMER IS THE STAR OF THE
TEAM
Q -UTUAL ACCEPTANCE BETWEEN MEMBERS AND /-) MARKET PART
NERS
Q 2ELIABLE AND FAIR RELATIONSHIPS
Q 7ILLINGNESS TO ENGAGE IN REAL CO OPERATION
Q /PEN COMMUNICATION
Q 2EADINESS TO GIVE AND RECEIVE POSITIVE CRITICISM
Q )MPORTANT DECISIONS MUST BE TAKEN IN CONSENSUS
Q !CTIVE PARTICIPATION OF ALL MEMBERS IN STIMULATING THE MOTIVA
TION FOR CO OPERATION
4HE BOARD OF DIRECTORS MANAGER ANDOR PRESIDENT MUST NOT BE REQUIRED

SPECIALISTS IN ALL MARKETING AREAS 4HIS WOULD BE UNREALISTIC (OWEVER MANAGEMENT
IT IS IMPORTANT THAT PEOPLE WHO ARE ENGAGED IN MANAGEMENT HAVE COMPETENCES
A SET OF CORE COMPETENCES 4HEY SHOULD AT LEAST HAVE THE FOLLOWING
ABILITIES

PEOPLE WITH CLEAR VISION

ALL ROUNDERS THAT ARE ABLE TO CONCEPTUALISE IDEAS AS CLEAR
STRATEGIC AND REALISTIC OPERATIONAL OBJECTIVES
ABLE TO UNDERSTAND MAIN MARKETING PRINCIPLES
GOOD ORGANISERS AND PLANNERS MANAGERS
CREATIVE AND WILLING TO INTEGRATE NEW IDEAS INTO THE BUSINESS
EXCELLENT AT COMMUNICATING IDEAS AND SERVICES
KEEN AND ABLE TO NETWORK WITH DIFFERENT PARTNERS BOTH WITHIN
AND OUTSIDE THE SUPPLY CHAIN
SOCIALLY COMPETENT
DELEGATION OR 4HESE PEOPLE MUST NOT NECESSARILY BE GOOD BOOKKEEPERS OR PUBLICITY

OUTSOURCING OF SPECIALISTS 3UCH FUNCTIONS CAN BE DELEGATED INTERNALLY MORE EASILY
FUNCTIONS AND MORE COST EFFECTIVELY OR OUTSOURCED FOR EXAMPLE TO
MARKET RESEARCH AGENCIES WHICH SUPPORT SMALL ENTERPRISES

PUBLIC RELATIONS OR COMMUNICATION STRATEGY DESIGN AGENCIES
lNANCE SPECIALISTS WITH EXPERTISE IN LARGER INVESTMENTS EG
FROM BANKS
MANAGEMENT CONSULTANTS WHO CAN HELP WITH PERIODICAL EX
TERNAL ANALYSIS AND EVALUATION OF THE BUSINESS
)T IS IMPORTANT THAT A lNANCE STRATEGY IS BUILT UPON REALISTIC AS

SUMPTIONS )NVESTMENT SHOULD HELP TO IMPROVE THE STRATEGIC POSITION
OF AN /-) IN THE MARKETPLACE BY MAINTAINING SUFlCIENT LIQUIDITY AND
SOUND lNANCE A SATISFACTORY MEDIUM TO LONG TERM RETURN RATECASH mOW AS OUTLINED
AND INVESTMENT IN A BUSINESS PLAN SEE 3UCH INVESTMENT MIGHT BE NECESSARY IN
STRATEGY STORAGE AREAS PROCESSING EQUIPMENT AND STAFF OR MARKETING CONCEPTS
&URTHERMORE INVESTMENT MIGHT ALSO BE NECESSARY TO IMPROVE THE
WORKING CONDITIONS OF THE STAFF WITH REGARD TO EFlCIENCY AND MOTIVA
TION EG OFlCE EQUIPMENT AND CONDITIONS
!LL THESE INVESTMENTS NEED CAPITAL GENERALLY IN THE FORM OF
EXTERNAL CAPITAL FROM BANKS PRIVATE CAPITAL EG FROM MEMBERS AND
SUPPORTERS OF THE INITIATIVE OR CAPITAL FROM PUBLIC SOURCES /NE
PROBLEM IS THAT GIVEN THE RISK BANKS ARE OFTEN VERY RESTRICTIVE IN PRO
VIDING CAPITAL FOR SMALL MARKETING PROJECTS 2EGIONAL DEVELOPMENT
BANKS MIGHT BE MORE OPEN TO SUCH lNANCING THAN NATIONAL BANKS

3TART UP PHASE
@&AILED /-) APPROACH IN A 'ERMAN CASE

3HORTCOMINGS IN MANAGEMENT AND lNANCING
4HE VISION OF ONE /-) ANALYSED WAS TO MAKE IT PROlTABLE FOR FARMERS
TO SELL THEIR PRODUCTS TOGETHER AT A WEEKLY MARKET 4HE MAIN OBJECTIVE
OF THE /-) WAS TO OBTAIN A GOOD PRICE FOR ITS PRODUCTS )N ADDITION
SOCIAL OBJECTIVES WERE DElNED SUCH AS CREATING AND SAVING JOBS AND
BUILDING UP A NETWORK AMONG FARMERS 3IX FARMERS DECIDED TO BUILD
UP A MARKETING INITIATIVE TOGETHER AND TO OPERATE A STALL AT DIFFERENT
MARKETS IN THE AREA !T THESE MARKETS THE /-) SOLD ITS OWN ORGANIC
PRODUCTS SUCH AS COWS EWES AND GOATS MILK DAIRY PRODUCTS LAMB
BEEF PRODUCTS EGGS BREAD AND PASTA PRODUCTS )N ORDER TO GET THE
DIFFERENT MARKET STALLS RUNNING A SPECIAL SALES CAR WAS NEEDED "E
CAUSE /-)S IN 'ERMANY MUST BUY NEW INVESTMENT GOODS TO OBTAIN
GOVERNMENT lNANCIAL SUPPORT FOR THE INVESTMENTS THE /-) BOUGHT
A NEW SALES CAR !T THE TIME THE /-)S MANAGEMENT DID NOT HAVE
ENOUGH KNOWLEDGE OF MANAGEMENT AND lNANCE TO REALISE THAT THIS
INVESTMENT EVEN WITH GOVERNMENT SUPPORT WAS MUCH HIGHER THAN
A SECOND HAND SALES CAR WITHOUT lNANCIAL SUPPORT 4HE RESULTING l
NANCIAL BURDEN WAS THE MAIN REASON FOR THE FAILURE OF THE /-) 7ITH
THE BENElT OF HINDSIGHT THE MANAGERS ALSO MENTIONED THE FOLLOWING
REASON FOR THE /-)S FAILURE THE /-) WAS MANAGED BY SIX PEOPLE FAR
MERS WHO WERE ALSO THE SUPPLIERS INSTEAD OF A FULL TIME MANAGER
4HE ORGANISATIONAL EFFORT WAS GROSSLY UNDERESTIMATED $ECISIONS
MADE BY ALL THE FARMERS WERE OFTEN PROBLEMATIC AND TOO TIME CON
SUMING 4HE /-) HAD TO CEASE OPERATIONS AFTER FOUR YEARS
"ASED ON THE RESULTS OF ANALYSIS OF MANY /-)S WITHIN %UROPE

THE FOLLOWING RECOMMENDATIONS SHOULD BE FOLLOWED IF AN /-) PLANS
TO UNDERTAKE LARGER INVESTMENTS
TO PREPARE A BUSINESS PLAN SEE ALSO #HAPTER

TO MAKE A lNANCIAL PLAN THAT IS NOT PRIMARILY BASED ON PUBLIC REALISTIC
FUNDING IN ORDER TO AVOID UNREALISTIC COST EFlCIENCY INVESTMENT
TO MAKE A CASH mOW ESTIMATION FOR THE PERIOD WHEN PUBLIC SUP PLANNING
PORT IS NO LONGER PROVIDED
TO GIVE PRECEDENCE TO ADAPTING EXISTING BUILDING CAPACITIES IN
STEAD OF NEW BUILDINGS

TO BETTER OUTSOURCE SUCH FUNCTIONS LIKE TRANSPORTDISTRIBUTION

MARKET RESEARCH TO SPECIALISED lRMS
TO INVEST IN HUMAN CAPITAL RATHER THAN IN BUILDINGS KNOWING
THAT THE SUCCESS OF /-)S DEPENDS VERY MUCH ON THE SKILLS AND
THE PROFESSIONALISM OF THE STAFF
TO INVOLVE PEOPLE WHO CAN PROVIDE lNANCIAL SUPPORT IN THE PRE
PARATORY PHASE EG REGIONAL BANKS
)N SOME CASES PROCESSING lRMS MIGHT EVEN BE INTERESTED IN

HELPING WITH THE COSTS OF SOME /-) INVESTMENTS THAT HELP TO IMPROVE
THE QUALITY OF THE END PRODUCT EG DRYING EQUIPMENT FOR HERBS
IMPLEMENTATION 4HE IMPLEMENTATION OF A MARKETING PLAN MEANS THE TRANSFORMATION

OF THE MARKETING OF STRATEGIC MORE THEORETICAL OBJECTIVES INTO OPERATIONAL MORE
PLAN PRACTICAL OBJECTIVES BY MEANS OF A SET OF WELL TUNED ACTION PLANS OR
INDIVIDUAL PROJECTS WHICH ARE PART OF THE OVERALL IMPLEMENTATION
PLAN
7HILE THE MARKETING STRATEGY CONCENTRATES ON QUESTIONS ABOUT
THE @WHAT AND @WHY MARKETING IMPLEMENTATION INVOLVES ASKING
QUESTIONS ABOUT THE @WHO @WHERE @WHEN AND @HOW OF MARKETING
MEASURES 4HIS MEANS THAT MILESTONES MUST BE DElNED AND IMPLE
MENTED
5SING THE EXAMPLE OF A MILK PRODUCING ORGANISATION lGURE
SHOWS HOW PRICE POLICY CAN BE DIVIDED UP INTO SINGLE MILESTONE
ACTIVITIES

3TART UP PHASE
-ARKETING MIX
$ISTRIBUTION 0ROMOTION
POLICY POLICY
0RODUCT 0RICE
POLICY POLICY
-EASURES 2ESPONSIBLE $EADLINE 3TATUS

PERSONS
#ALCULATE THE AVERAGE UNIT PRODUCTION COST
%STIMATE THE SUPPLY DEMAND DEVELOPMENT
FOR THE RELEVANT MARKETS
%STIMATE THE COMPETITION SITUATION AND
COMPETITOR SALES PRICES
$EFINITION OF A SALES PRICE FRAME FOR
NEGOTIATIONS WITH MARKET ACTORS
$EFINITION OF PERIODS FOR @SPECIAL PRICES
!NNUAL NEGOTIATION WITH RELEVANT MARKET
ACTORS CONCERNING VOLUMES AND PRICES
2EGULAR PRICE MONITORING
x
&IGURE %XAMPLE FOR PLANNING INDIVIDUAL MARKETING MEASURES WITHIN THE PRICE POLICY
AREA

)F THE OVERALL GOAL AND STRATEGIES ARE CLEAR IT MIGHT BE BETTER TO

USE ACTION DIVIDE IMPLEMENTATION INTO SEVERAL SUB PROJECTS FOR DIFFERENT CUS
PLANS WITH CLEAR TOMERS AND PRODUCT GROUPS )T WOULD THEN BE NECESSARY TO DElNE THE
DEADLINES AND INTERMEDIATE MILESTONES AND DEADLINES OF THE SPECIlC ACTION PLANS
MILESTONES WHICH IF ACHIEVED MOTIVATE THE PARTICIPANTS AND ALLOW THEM TO BETTER
MEASURE PROGRESS
$EVELOPING AN IMPLEMENTATION GUIDELINE FOR MARKETING
MEASURES CAN BE SEEN BASICALLY AS A CLASSICAL PLANNING PROCESS AS
DESCRIBED
-ONITORING AND CONTROL CONCEPTS

4HE PROCESS OF lNANCIAL MONITORING AND CONTROL IS DESCRIBED GENE
RALLY IN THE LITERATURE (OWEVER THE AUTHORS INTERPRET THE TERM IN A
BROADER SENSE AND INCLUDE IN THE PROCESS MONITORING AND CONTROL OF
@0OHJOLAN ,UOMU &INLAND

2ELATIONSHIP MARKETING WITH STRONG CO OPERATION
4HE COMPANY WORKS AS INTERMEDIARY BETWEEN ORGANIC FARMERS PRO
DUCING GRAIN AND MOSTLY FOREIGN CUSTOMERS 4HE BUSINESS IS BASED
ON THE PRINCIPLES OF RELATIONSHIP MARKETING 4HE KEY ELEMENTS OF THE
BUSINESS MIGHT BE SEEN AS WILLINGNESS TO CO OPERATE WITH EVERY PART
NER FARMERS CUSTOMERS ADMINISTRATORS ADVISERS FOR A LONGER PERIOD
RESPECT FOR RELATIONSHIPS ACTIVE WORKING IN DIFFERENT NETWORKS AND
BUILDING UP A GOOD INFORMATION SYSTEM REGARDING THE DEMAND SITU
ATION AND HARVEST ESTIMATIONS 4HE COMPANY HAS SUCCESSFULLY USED
ITS INFORMATION NETWORKS AND HAS A GOOD REPUTATION IN THE MARKETS
)T HAS BEEN ABLE TO PROVIDE ORGANIC FARMERS WITH A BETTER PRICE FOR
THEIR GRAIN AS THE EXPORT MARKETS HAVE HAD A BETTER PRICE LEVEL THAN
THE DOMESTIC MARKET )NDEED THIS HAS STABILISED THE WHOLE ORGANIC
GRAIN MARKET BY EXPORTING THE SURPLUS 4HE COMPANY HAS BEEN ACTIVE
IN DEVELOPING CONTRACT BASED FARMING IN THE VERY SCATTERED AND BADLY
ORGANISED ORGANIC GRAIN AND FODDER SECTOR )T HAS GROWN BY LEAPS AND
BOUNDS AND IS A PROlTABLE BUSINESS WITH AN IMPACT ON THE WHOLE
CEREAL MARKET IN &INLAND

3TART UP PHASE
@+ORNKREIS 'ERMANY
)NNOVATION ACTIVITIES MUST BE MAINTAINED
4HE +ORNKREIS WAS FOUNDED BY FARMERS WITH THE INTENTION OF
SELLING ORGANIC CEREALS .OW THE /-) COMPRISES FARMERS 3OME OF
THE PRODUCTS ARE PROCESSED INTO BAKERY PRODUCTS BY SUBCONTRACTORS
4HESE BAKERY PRODUCTS ARE DELIVERED TO ORGANIC FOOD SHOPS AND BAKER
IES 4HE REMAINING CEREAL IS SOLD THROUGH DIFFERENT LARGER CUSTOMERS
4HE /-) ALWAYS PAID CLOSE ATTENTION TO PROVIDING GOOD SERVICE AND
HIGH QUALITY (ENCE THE /-) ALSO OFFERS TRAINING FOR THE SALES STAFF OF
THE ORGANIC BAKERY PRODUCTS
.EVERTHELESS IT MUST BE MENTIONED THAT LOW RISK AND LITTLE WILLINGNESS
TO ENGAGE IN INNOVATION ARE REASONS FOR A SLIGHT DECLINE IN TURNOVER
OVER THE LAST FEW YEARS 3OURCE 5NIVERSITY OF +ASSEL 'ERMANY
ALL MANAGEMENT ACTIVITIES TO EVALUATE THE DEGREE TO WHICH DElNED

OBJECTIVES HAVE BEEN ACHIEVED -ONITORING AND CONTROL CONCEPTS ARE
AN IMPORTANT ELEMENT OF THE MANAGEMENT PLAN AND THEREFORE AN IM
PORTANT FACTOR FOR SUCCESS
-ONITORING AND CONTROL CONCEPTSMEASURES CAN BE DIFFERENTIAT
ED INTO STRATEGIC AND OPERATIONAL ELEMENTS SEE TABLE 4HE STRATEGIC
ELEMENT FOCUSES ON THE LONG TERM OBJECTIVES OF AN ENTERPRISEMARKET
ING INITIATIVE 4HE CRITERIA AND THE TOOLS USED ARE MUCH MORE QUALITA
TIVE AND DESCRIPTIVE 4HEY TRY TO RECOGNISE SUCCESS FACTORS POTENTIAL
AND BOTTLENECKS FOR THE FUTURE OPPORTUNITIES AND THREATS AND HELP TO
DEVELOP AND OPTIMISE STRATEGIC MEASURES
4ABLE /VERVIEW ABOUT DIFFERENT LEVELS OF MONITORING AND CONTROL

-ONITORINGCONTROL
&OCUS #RITERIA 0OSSIBLE TOOLS
MEASURES FOR
3TRATEGIC ,ONG TERM OBJEC 1UALITATIVE AND DE 0ORTFOLIO ANALYSIS
OBJECTIVES TIVES SCRIPTIVE EFFECTIVENESS 37/4 ANALYSIS
+EY ECONOMIC lGURES
3HORT TERM YEAR 1UANTITATIVE COST
/PERATIONAL EG TURNOVER RATES
OR MEDIUM TERM EFlCIENCY LIQUIDITY
OBJECTIVES OF RETURN ON INVEST
YEARS OBJECTIVES PROlTABILITY
MENT CASH mOW ETC

/PERATIVE
/PERATIVE "UDGETING
"UDGETING -ONITORING
-ONITORING
0LANNING
0LANNING
/BJECTIVES )NCOME BUDGET #ONTROL OF

OF
-EASURES
#OST BUDGET
#OST BUDGET
2ENTABILITY
0ROFITABILITY
$ETAILED
,IQUIDITY
,IQUIDITY
PLANNING ,IQUIDITY
!NNUAL
OBJECTIVES 3UCCESS BALANCE
3UCCESS BALANCE
!DAPTION OF
BUDGET
!NNUAL
MEASURES "UDGET
"UDGET BALANCE
&IGURE 4HEORETICAL PROCESS FOR BUDGETING AND MONITORING OF /-) ACTIVITIES
4HE MONITORING AND CONTROL MEASURES MUST INCLUDE ALL AREAS OF

BUSINESS ACTIVITIES 4HESE SHOULD BE CARRIED OUT REGULARLY TO ASCERTAIN
WHETHER THEY ARE STILL APPROPRIATE WITH REGARD TO THE CHANGING ENVI
RONMENT
)N MANY /-)S THE MONITORING AND CONTROL CONCEPT IS OFTEN NEGLEC

TED 0ROBLEMS THAT HAVE BEEN IDENTIlED INCLUDE THE FOLLOWING
PROBLEMS WITH Q /BJECTIVES ARE NOT DElNED CLEARLY ENOUGH THEY ARE NOT OPERA
IMPLEMENTATION TIONAL NO QUANTIlCATION NO CHECK NO REFORMULATION ETC
OF MONITORING Q .O CLEAR INDICATORS ARE SET UP TO MEASURE THE RESULTS
AND CONTROL Q .OT ENOUGH RELEVANT INFORMATION IS COLLECTED BY THE MANAGE
MEASURES MENT TO FACILITATE REGULAR PERFORMANCE ANALYSIS OF THE ENTER
PRISE
Q )NSTRUMENTS FOR MONITORING AND CONTROL ARE NOT THOROUGHLY
UNDERSTOOD OR NOT APPLIED SYSTEMATICALLY

3TART UP PHASE
Q )NITIATIVES WITH MORE THAN ONE PRODUCT ARE NOT ABLE TO CLEARLY
EVALUATE WHICH PROlT SHARE CAME FROM WHICH PRODUCT
Q 4HERE IS NO SYSTEMATIC PROCEDURE FOR DEALING WITH COMPLAINTS
FROM CUSTOMERS EG QUALITY PROBLEMS ETC
)N THE FOLLOWING PARAGRAPHS SOME OF THE MAIN AREAS OF MONITORING

AND CONTROL ARE DESCRIBED
)T IS IMPORTANT THAT PRODUCTION PROCESSING AND MARKETING STRATEGIC

ARE ORGANISED IN SUCH A WAY THAT A HIGH DEGREE OF mEXIBILITY CAN BE MONITORING AND
ACHIEVED WHILE MAINTAINING HIGH COST EFlCIENCY CONTROL OF SUPPLY
)T IS ALSO IMPORTANT TO REGULARLY ASSESS WHETHER THE RIGHT QUAN MANAGEMENT
TITY OF PRODUCTS OF THE CORRECT QUALITY WILL BE AVAILABLE AT THE RIGHT
TIME AND PLACE FOR THE CUSTOMER #OMPARISONS OF THE PAST TWO YEARS
AS WELL AS WITH COMPETITORS ARE USEFUL AND WILL SHOW IF THE /-) IS
IMPROVING 3UCH AN ANALYSIS COULD FOCUS FOR EXAMPLE ON THE SUPPLI
ERS PRODUCT QUALITY AND IDENTIFY THREATS WITH REGARD TO QUALITY STAN
DARDS AND AVAILABILITY FROM DIFFERENT SUPPLIERS 4HIS MIGHT RESULT IN
THE EXCLUSION OF CERTAIN SUPPLIERS FARMERS
&OR STRATEGIC MONITORING AND CONTROL CONDUCTING ONE OR SEVERAL USE PORTFOLIO
PORTFOLIO ANALYSES ARE RECOMMENDED 4HESE SYSTEMS WHICH ARE WELL ANALYSIS
DESCRIBED IN THE LITERATURE ARE USEFUL TO ENABLE /-)S TO GAIN A BETTER
PICTURE OF WHICH STRATEGY SHOULD BE CHOSEN FOR WHICH PRODUCTS COM
PARED TO THEIR COMPETITORS
4HE MAIN TASK IS TO IDENTIFY IF SUITABLE STRATEGIES AND MEASURES
HAVE BEEN CHOSEN 4HIS WILL DEPEND VERY MUCH ON MARKET CONDITIONS
AND THE LIFE CYCLE OF A PRODUCT
4HIS ANALYSIS CAN BE DONE BY CARRYING OUT SEVERAL KEY ECONOMIC
ANALYSES FOR EXAMPLE A COMPLETE MULTI STAGE GROSS MARGIN ANALYSIS
OF THE DIFFERENT PRODUCTS TO lND OUT WHICH PRODUCTS WHICH CUSTO
MERS OR WHICH SALES AREAS ARE THE MOST PROlTABLE )T IS IMPORTANT
TO ANALYSE TURNOVER WITH REGARD TO GROWTH RATES AND MARKET SHARE
DEVELOPMENT IN THE FUTURE WHICH IS THE BASIS OF A PROGNOSIS OF FU
TURE MARKET POTENTIAL !NOTHER TOOL IS THE BREAK EVEN POINT ANALYSIS
WHICH SHOWS WHAT MINIMUM TURNOVER ALLOWS ALL VARIABLE AND lXED
COSTS OF A PRODUCT TO BE COVERED
4HE CONTROL OF THE PROMOTION MEASURES UNDERTAKEN IS OFTEN
FORGOTTEN (OWEVER EVALUATING THE IMPACT OF PROMOTION MEASURES

MONITORING AND ENABLES ONE TO GET AN IDEA OF THEIR EFFECTIVENESS %FFECTIVENESS IS

CONTROL CONCEPT MEASURED IN TERMS OF THE DEVELOPMENT OF THE LEVEL OF KNOWLEDGE OF
OF PROMOTION A PRODUCT AND THE PRODUCTS IMAGE IN CONSUMERS EYES 3TANDARD
MEASURES MARKET RESEARCH TECHNIQUES ARE USED TO MEASURE CONSUMER AWARE
NESS
)T MUST BE MENTIONED THAT CONSUMER SURVEY RESULTS CANNOT BE

USED DIRECTLY 3OMETIMES THEY SUGGEST HAVING HIGH IMAGE PRODUCTS
THAT CONVINCE OF ALL CONSUMERS %VEN IF THERE IS A VERY POSITIVE
ATTITUDE TOWARDS AND A CERTAIN INTEREST IN AN /-) AND ITS PRODUCTS
THIS DOES NOT NECESSARILY MEAN THAT CONSUMERS WILL ALSO BUY THOSE
PRODUCTS /NLY ONE THIRD OF A CONSUMERS BUYING DECISIONS RELATING
TO FOOD ARE DRIVEN BY ATTITUDES 4HE CONCRETE BUYING SITUATION WHICH
CAN CHANGE NEARLY EVERY DAY FOR THE SAME PRODUCT AND SOCIAL ENVI
RONMENT FAMILY FRIENDS HAVE MORE INmUENCE ON THE BUYING DECI
SION .EVERTHELESS RESULTS OF CONSUMER SURVEYS AT LEAST SHOW WHETHER
OR NOT THE PRODUCTS AND THE PROCESS OF MARKETING ARE GOING IN THE
RIGHT DIRECTION
MONITORING AND ,IQUIDITY IS INmUENCED VERY MUCH BY INVESTMENT )T IS PARTICULARLY

CONTROL CONCEPT IMPORTANT TO ANALYSE LIQUIDITY WHEN PLANNING SUBSTANTIAL NEW INVEST
OF INVESTMENT MENTS !N INVESTMENT SHOULD CLEARLY IMPROVE THE lNANCIAL SITUATION
LIQUIDITY AND OF AN /-) IN THE NEAR FUTURE /THERWISE IT IS BETTER SIMPLY TO MAKE
lNANCE SMALL BUT EFlCIENT ADAPTATIONS OR RENOVATIONS TO ACCOMMODATION OR
STRATEGIES EQUIPMENT
!N ANALYSIS OF THE IMPACT OF A FUTURE INVESTMENT SHOULD LOOK
NOT ONLY AT THE ECONOMIC BENElT OF AN INVESTMENT BUT ALSO INCLUDE
AN ANALYSIS OF THE OTHER BENElTS TECHNICAL SOCIAL ENVIRONMENT ETC
&URTHERMORE THREAT ANALYSIS CAN PREDICT WHAT WOULD HAPPEN IF THE
MARKET ENVIRONMENT WERE TO CHANGE SIGNIlCANTLY EG BREAKDOWN OF
DEMAND
ESTABLISH AN 4HE MONITORING AND CONTROL OF INVESTMENTS IS PART OF THE ASSESSMENT

EARLY WARNING OF THE lNANCE STRATEGY AND PLANNING 4HE FOCUS OF SUCH AN ANALYSIS
SYSTEM SHOULD BE
3HORT TERM ASPECTS LIQUIDITY CASH mOW FOR INVESTMENTS

-EDIUM TERM ASPECTS RETURN ON INVESTMENT RATE
,ONG TERM ASPECTS CAPITAL STRUCTURE DEPTH COEFlCIENT

3TART UP PHASE
/-)S ARE RECOMMENDED TO HAVE SUCH AN ANALYSIS CARRIED OUT BY

EXPERIENCED EXTERNAL PEOPLE FROM TIME TO TIME 4HIS SHOULD HELP TO
ESTABLISH AN @EARLY WARNING SYSTEM AND TO GET A CERTAIN FEELING FOR THE
CURRENT ECONOMIC SITUATION OF THE /-)
@'ROWING WITH .ATURE 5NITED +INGDOM

-ONITORING BY EXTERNAL EVALUATOR
4HE /-) 'ROWING WITH .ATURE USED A CONSULTANT TO EVALUATE THEIR
BUSINESS ACTIVITIES AND USED THE INFORMATION TO MAKE RELEVANT CHAN
GES TO THEIR OPERATIONS
3OURCE 3CHOOL OF -ANAGEMENT AND "USINESS
5NIVERSITY OF 7ALES !BERYSTWYTH 5NITED +INGDOM
)N SMALLER ENTERPRISES WHICH /-)S USUALLY ARE IT IS RECOM MONITORING

MENDED THAT MONITORING AND CONTROL ALSO LOOK AT THE FOLLOWING AND CONTROL
AREAS MEASURES OF
OTHER RELEVANT
HUMAN CAPITALSTAFF QUALIlCATION MOTIVATION NEED FOR AREAS
TRAINING
TIME RESOURCE MANAGEMENT PRIORITY SETTING BY MANAGE
MENT AND STAFF
ENVIRONMENTAL MANAGEMENT WASTE AND ENERGY MANAGE
MENT ETC
RESEARCH AND DEVELOPMENT NEED FOR SMALL MARKET RESEARCH
SURVEY
INFORMATION MANAGEMENT APPROPRIATE EQUIPMENT
4HE ANSWERS TO THESE QUESTIONS FACILITATES THE SELECTION OF THE

RIGHT MONITORINGCONTROL MEASURES
Q $O THE MONITORING AND CONTROL MEASURES SHOW THAT THE OBJEC
TIVES ARE ACHIEVED
Q #AN THE FACTORS FOR SUCCESS AND FAILURE BE IDENTIlED
Q !RE GAPS BETWEEN OBJECTIVES AND REALITY VISIBLE
Q (AVE PROPOSALS FOR CORRECTIONS BEEN ELABORATED

-ATURING PHASE
!DAPTATION OF OBJECTIVES AND CONCEPTS

4HE ADAPTATION OF OBJECTIVES AND CONCEPTS IS ONE IMPORTANT POINT FOR
AN ESTABLISHED /-) 4HE FOLLOWING TEXT WILL GIVE A SHORT AND ABSTRACT
EXAMPLE OF HOW AN ESTABLISHED /-) ANALYSED THE SITUATION OF THE
/-) ONE YEAR LATER
4HE /-) INVOLVES CO OPERATION BETWEEN ORGANIC FARMERS AND

EXAMPLE AN ORGANIC BAKERY LOCATED MINUTES AWAY FROM A BIGGER CITY 4HE
OF THE ANALYSIS FARMERS VISION WAS MAINLY TO OBTAIN A BETTER PRODUCER PRICE AND TO
OF AN /-) ENSURE THE SALE OF THEIR CEREALS
!S OBJECTIVES THE FOLLOWING WERE DElNED
TO KEEP THE ADDED VALUE WITHIN THE /-)

%CONOMIC OBJECTIVES
AND TO ENSURE STABLE PRICES AND SALES
TO SUPPORT STABILISE AND INCREASE ORGANIC
%NVIRONMENTAL OBJECTIVES
AGRICULTURE IN THE REGION
TO MAINTAIN JOBS IN AND SUPPORT THE
3OCIAL OBJECTIVES
DEVELOPMENT OF THE REGION
!FTER ONE YEAR THE STRATEGY OF THE /-) TO BUILD A MILL AND CO
$OES THE OWN OPERATE WITH AN ORGANIC BAKERY HAS DEVELOPED VERY WELL 4HE BAKERY
CONCEPT WORK AS ONLY SELLS BAKERY PRODUCTS PRODUCED WITH mOUR FROM THE /-) UNDER
IT PLANNED A REGIONAL ORGANIC LABEL 4HE BAKERY HAS A STORE AND A MARKET STALL IN
THE CITY !T THE MOMENT THE BAKERY IS CONSIDERING OPENING ANOTHER
STORE

-ATURING PHASE
!NALYSIS OF THE /-) IS VERY HELPFUL FOR ASCERTAINING WHETHER THE

CONCEPT IS WORKING AS PLANNED AND WHETHER THE OBJECTIVES HAVE BEEN
ACHIEVED !TTENTION SHOULD FOCUS ON THE FOLLOWING POINTS
,OCATION 4HE CONDITIONS FOR PRODUCTION TRANSPORT AND ACCESS TO SALES MARKETS ARE STILL
VERY GOOD
0RODUCTION 4HE MEMBERS OF THE /-) ARE MAINLY MIXED ORGANIC FARMS WHICH CO OPERATE
FOR THE MARKETING OF THE CEREAL PRODUCTS "ECAUSE THE PROCESSING STILL HAS
SPARE CAPACITIES AND THE DEMAND STILL HAS THE POTENTIAL TO GROW THE /-) IS
LOOKING FOR TWO NEW MEMBERS
"USINESS 5P TO NOW THE /-) WAS MANAGED BY A MEMBER IN ADDITION TO HIS FARM WORK
MANAGEMENT 4HE /-) HOWEVER RECOGNISED THAT MANAGEMENT OF THE /-) DEMANDED FULL
ATTENTION 4HE /-) IS THEREFORE LOOKING FOR A PERSON WHO WILL MANAGE THE
/-) EXCLUSIVELY
&INANCES 7HEN THE /-) STARTED A lNANCIAL PLAN WAS DRAFTED FOR THREE YEARS !FTER THE
lRST YEAR THE lNANCIAL SITUATION OF THE /-) WAS ANALYSED AGAIN VIA AN EXTER
NAL CONSULTANT TO AVOID @OCCUPATIONAL BLINDNESS 4HE ANALYSIS SHOWED THAT
THE INVESTMENT COSTS INVOLVED IN STARTING THE /-) MILL WERE SUCCESSFULLY
AMORTISED BY PROlTS FROM THE CEREAL PRODUCTS
-ARKETING !NALYSIS OF THE /-)S MARKETING SHOWED THAT PRODUCT IDENTIlCATION IS VERY
HIGH AND EXPANSION CAN BE PUT INTO PRACTICE BY ENLARGING THE QUANTITY AND
PRODUCT RANGE
!NALYSIS ALSO SHOWED THAT AN ACTIVE COMMUNICATION POLICY IS NECESSARY TO
ESTABLISH A REGIONAL PREMIUM LABEL FOR BAKERY GOODS AND SO ENSURE STABLE
PREMIUM PRICES
4HE DETAILED CRITERIA FOR THE OVERALL ANALYSIS OF AN /-) WILL BE

DESCRIBED IN THE FOLLOWING SECTION

#HECKLIST FOR ,OCATION

OVERALL ANALYSIS .ATURAL PRODUCTION CONDITIONS FOR EXAMPLE SOIL CLIMATE IN
THE INDIVIDUAL PRODUCTION AREAS
-ARKET CONDITIONS
4RANSPORT CONNECTIONS
s STREETS
s PUBLIC TRANSPORT
!CCESS TO SALES MARKETS
PROXIMITY TO
s PROCESSORS
s SUPPLIERS
s RETAILERS
s CONSUMERS
!CCESS TO PROCUREMENT MARKETS
PROXIMITY TO
s SUPPLIERS OF EQUIPMENT MEANS OF PRODUCTION
s SUPPLIERS OF OTHER PRODUCTS TO SUPPLEMENT THE RANGE OF
PRODUCTS
)NTERNAL TRANSPORTATION CONDITIONS
s LOCATION OF THE PRODUCTION AREAS
s LOCATION OF POSSIBLE SALES SHOPS TO EACH OTHER
s LOCATION OF STORAGE OR PROCESSING FACILITIES
!TTRACTIVENESS OF THE /-) AND ITS ENVIRONMENT
s APPEARANCE OF THE /-) AND POSSIBLE SALES SHOPS
s ATTRACTIVENESS OF THE ENVIRONMENT
s PROXIMITY TO SPECIAL ATTRACTIONS IN THE REGION
0RODUCTION QUANTITY AND QUALITY SPECIlED FOR THE PRODUCT

0RODUCTION CAPACITY
0RODUCT FOR EXAMPLE ANIMAL PRODUCTION PLANT PRODUCTION
0ROCESSING CAPACITY
3TORAGE CAPACITY
4RANSPORT CAPACITY
0ROlCIENCY LEVEL QUALITY QUANTITY AND STABILITY
0LANT PRODUCTION
!NIMAL PRODUCTION
0ROCESSING
0RODUCTION TECHNOLOGY
#OSTS OF PRODUCTION
"USINESS MANAGEMENT EMPLOYEES

s CREATIVITY
s NEGOTIATING SKILLS
s ENJOY WORKING WITH OTHER PEOPLE

-ATURING PHASE
s OPEN MINDEDNESS REGARDING NEW THINGS

s mEXIBILITY
s MOTIVATION
&INANCES
s CAPITAL RESOURCES SHORT TERM AND LONG TERM
s ACCOUNTS PAYABLE
s LIQUIDITY
-ARKETING
$ISTRIBUTION
#HANNELS OF DISTRIBUTION
$ELIVERY SERVICE
s DELIVERY TIME
s DELIVERY CONDITIONS
s DELIVERY mEXIBILITY
0RODUCT POLICY
)NDIVIDUAL PRODUCTS
s PRODUCT CHARACTERISTICS
s CONSISTENCY OF PRODUCT CHARACTERISTICS QUALITY CONSISTENCY
s PRODUCT ENVIRONMENT ENVIRONMENTALLY SOUND SUPPORTING
ANIMAL WELFARE ETC
s PRODUCT PACKAGING
s PRODUCT IDENTIlCATION TRADEMARK
s PRODUCT IMAGE
0RODUCT MIX
s EXTENT
s SPECIALITIES
s DEPENDENT ON THE SEASON
s SERVICE
!DDITIONAL SERVICE TO THE PRODUCT
s INFORMATION ABOUT USE PROCESSING ETC
s GUARANTEE OF QUALITY CHARACTERISTICS
0RICING
0RICE LEVEL
#ONSISTENCY OF THE PRICE
$IFFERENTIAL PRICING
$ISCOUNT
4ERMS OF DELIVERY AND PAYMENT
#OMMUNICATION POLICY
!DVERTISING
3ALES PROMOTION
0UBLIC RELATIONS

/FTEN IT IS HELPFUL TO USE EXTERNAL EXPERTS TO ANALYSE THE CURRENT BUSINESS SITUATION
&OTOS . 'LEIRSCHER - 3CHERMER
4HIS ANALYSIS CAN BE CARRIED OUT EITHER BY AN INSIDER OR BY AN

EXTERNAL PERSON !N INSIDER IS PROBABLY CHEAPER BUT @OCCUPATIONAL
BLINDNESS CAN STRONGLY INmUENCE THE RESULTS OF THE ANALYSIS )N ORDER
TO AVOID THIS PROBLEM AN EXTERNAL PERSON IS A BETTER SOLUTION FOR ANA
LYSING THE /-) 3UCH AN ANALYSIS MIGHT BE AN EXCELLENT TOPIC FOR A
DIPLOMA OR DEGREE THESIS 4RYING TO SAVE MONEY BY DOING THIS ANALYSIS
ALONE COULD END UP COSTING THE /-) MUCH MORE THAN FOR EXAMPLE
PROVIDING AN INCENTIVE FOR A DEGREE STUDENT
"ASED ON THE ANALYSIS IT SHOULD BE POSSIBLE TO ASCERTAIN WHERE

STRATEGIC THE /-) STANDS AT THE MOMENT 4HE RESULTS OF THE ANALYSIS MUST BE
MEETINGS DISCUSSED AT A STRATEGIC MEETING WITH THE SUPERVISORY BOARD THE MANA
GEMENT BOARD ETC 4HE PREVIOUS RESULTS OF THE /-) SHOULD BE COM
PARED TO THE OBJECTIVES INITIALLY COMPILED 4HE QUESTION THAT MUST
NOW BE ASKED IS @4O WHAT EXTENT HAVE THE OBJECTIVES BEEN ACHIEVED
)F THE OBJECTIVES HAVE BEEN COMPLETELY ACHIEVED WHICH COULD ONLY
BE THE CASE WITH OPERATIONAL SHORT TERM OBJECTIVES NEW OBJECTIVES
MUST BE DEVELOPED )F THE OBJECTIVES HAVE NOT BEEN ACHIEVED IT IS
NECESSARY TO ANALYSE THE REASONS FOR THE DIVERGENCES 4HIS CAN ALSO BE
DONE AT A STRATEGIC MEETING !LL THE IMPORTANT PEOPLE INVOLVED IN THE
/-) SHOULD ATTEND SUCH MEETINGS 4HESE CAN TAKE THE FORM OF DIFFE
RENT STRATEGIC MEETINGS WITH THE STAFF STAKEHOLDERS ETC 4OTAL TRANS
PARENCY IS VERY IMPORTANT DURING THE REVISION OF THE OBJECTIVES )T

-ATURING PHASE
IS ALSO HELPFUL TO HAVE AN EXTERNAL MODERATOR PRESENT AT STRATEGIC

MEETINGS 4HIS RENDERS DISCUSSION EASIER AND PROBABLY ALSO MORE
EFFECTIVE
!T SUCH STRATEGIC MEETINGS THE FOLLOWING QUESTION MUST BE DIS
CUSSED @7HAT WERE THE REASONS WHY THE OBJECTIVES WERE NOT ACHIEVED
4HERE MAY BE DIFFERENT REASONS FOR NOT ACHIEVING THE OBJECTIVES 3OME
OF THESE WILL BE DISCUSSED IN THE FOLLOWING CHAPTERS (ERE WE EXPLAIN
HOW TO PROGRESS IN THE EVENT THAT THE OBJECTIVES THEMSELVES OR THE
CONCEPTS ARE THE REASON FOR NOT HAVING ACHIEVED THE DESIRED RESULTS
)T IS POSSIBLE THAT THE lXED OBJECTIVES THEMSELVES ARE THE PROB

LEM 0OTENTIAL REASONS ARE
Q OBJECTIVES WERE TOO AMBITIOUS EUPHORIC /-) INITIATORS IN
ACCURATE MARKET ANALYSIS ETC CHECK THE
Q NO CLEAR HIERARCHY OF OBJECTIVES COMPETING OBJECTIVES OBJECTIVES
Q WRONG HIERARCHY OF OBJECTIVES OBJECTIVES THAT WERE NOT SO IM
PORTANT FOR THE START UP PHASE OF THE /-) WERE SEEN AS VERY
IMPORTANT EG PERSONAL OBJECTIVES OF SOME LEADING PERSONS
WERE GIVEN PRIORITY
)T MAY BE NECESSARY TO THINK THE lXED OBJECTIVES OVER AND REDE

SIGN THE HIERARCHY OF OBJECTIVES 4HIS CAN ALSO TAKE PLACE AT A STRATEGIC
MEETING
@&RANTSILAN YRTTITILA &INLAND

-ORE PROFESSIONALISM WITH CLEARER OBJECTIVES
4HE COMPANY MADE MAJOR ADAPTATIONS TO THE WAY IT MANAGED THE
BUSINESS FROM ON %ARLIER DECISIONS WERE GENERALLY BASED ON THE
VISION OF THE OWNERS !FTER ALL NEW PRODUCTS OR SERVICE IDEAS
WERE EVALUATED WITH REGARD TO PROlTABILITY ASPECTS AS WELL AS WHETHER
THESE PRODUCTS WERE APPROPRIATE TO THE IDEOLOGY OF THE COMPANY
TO THE QUALITY OBJECTIVES AND TO THE NEEDS OF THE SPECIlED CUSTOMER
SECTORS )N A WAY THIS ADAPTATION HAS HELPED PRODUCT DEVELOPMENT
BECAUSE NOW THE RESOURCES ARE USED MORE EFFECTIVELY 4HE COMPANY
STILL WANTS TO BE THE FORERUNNER IN THE HERB BUSINESS DEVELOPING NEW
PRODUCTS THAT MIGHT NOT EXIST YET IN &INNISH HERB MARKETS EG LOOKING
INTO ORGANIC COSMETICS 3OURCE 5NIVERSITY OF (ELSINKI
-IKKELI )NSTITUTE FOR 2URAL 2ESEARCH AND 4RAINING &INLAND

)T IS POSSIBLE THAT A CONCEPT THAT WORKED YESTERDAY WILL BE NOT EF

CHECK THE FECTIVE IN TODAYS MARKETPLACE &OR THIS REASON ANALYSING THE CONCEPT
BUSINESS OF THE /-) IS ALSO AN IMPORTANT ITEM !NALYSIS WILL SHOW IF THERE ARE
CONCEPT PROBLEMS WITH THE CONCEPT FOR EXAMPLE IF THE /-) IS NOT PRODUCING
MARKETING WHAT THE CUSTOMER IS ASKING FOR WRONG QUALITY WRONG QUANTITY ETC
STRATEGY ! CONCEPT THAT IS NOT ADAPTED TO THE DEMANDS OF THE MARKET CAN ALSO
BE A REASON FOR NOT ACHIEVING THE OBJECTIVES
&URTHERMORE IT IS POSSIBLE THAT THE BUSINESS CONCEPT IS GOOD
BUT THE MARKETING CONCEPT IS NOT WORKING 4HE PRODUCT MAY BE EX
CELLENT BUT FEW CONSUMERS ARE AWARE OF THE MAIN ADVANTAGES OF THE
PRODUCT BECAUSE OF A LACK OF ADVERTISING 4O lND OUT WHETHER FOR
EXAMPLE ADVERTISING OR THE WHOLE MARKETING CONCEPT IS THE PROBLEM
A CONSUMER SURVEY COULD BE VERY HELPFUL
&INALLY IT IS ALSO POSSIBLE THAT EXTERNAL FACTORS ARE THE REASON
WHY SOME OBJECTIVES HAVE NOT BEEN ACHIEVED 3OME FACTORS FOR EXAM
PLE FOOD SCANDALS CAN HAVE A NEGATIVE EFFECT ON THE OBJECTIVES OF AN
/-) 7HEN "3% WAS FOUND IN AN ORGANICALLY RAISED COW IN 'ERMANY
'ERMAN CONSUMERS ALSO STOPPED BUYING ORGANIC BEEF FOR A TIME !S A
RESULT MANY ORGANIC FARMERS WHO PURSUED THE STRATEGY OF PRODUCING
HIGH QUALITY ORGANIC BEEF HAD PROBLEMS SELLING THEIR BEEF 5NFORTU
NATELY EXTERNAL FACTORS LIKE FOOD SCANDALS CANNOT BE INmUENCED BY THE
/-) BUT THEY HAVE A BIG INmUENCE ON SALES FOR EXAMPLE 4HIS INmU
ENCE FOCUSES ATTENTION ON ACHIEVING OBJECTIVES
!DAPTATION OF NETWORKING
!S EXPLAINED IN #HAPTER NETWORKING IS VERY IMPORTANT FOR THE
/-) #ONSEQUENTLY ADAPTATION OF THE NETWORK IS ALSO NECESSARY 4O
ASCERTAIN WHETHER THE NETWORK SHOULD BE ADAPTED IT IS ALSO ESSENTIAL
TO ANALYSE THE NETWORK 3TRICTLY SPEAKING EACH PART OF THE NETWORK
SHOULD BE ANALYSED TO lND OUT IF ADAPTATION IS NECESSARY
)T IS POSSIBLE FOR THE NETWORK OF AN ESTABLISHED /-) TO BE VERY
DIFFERENT FROM THAT OF A NEWLY ESTABLISHED /-) )N THE PRE START
PHASE FOR EXAMPLE AUTHORITIES SUCH AS THE MUNICIPALITY OR OTHER
DEPARTMENTS DEALING WITH SPECIAL QUERIES PLAY AN IMPORTANT ROLE !S
THE /-) DEVELOPS OTHER PEOPLE BECOME MORE IMPORTANT )F THE /-)
IS STARTING UP IN BUSINESS THE PRESS OR ASSOCIATIONS THAT HELP THE /-)
GAIN A POSITIVE IMAGE MUST ALSO BE INCLUDED )T IS IMPORTANT FOR THE
/-) TO HAVE A POSITIVE PUBLIC IMAGE RIGHT FROM THE BEGINNING .E
VERTHELESS THE PRESS IS VERY IMPORTANT AT ALL TIMES AND SHOULD ALWAYS

-ATURING PHASE
BE GIVEN ATTENTION )F THE /-) IS UP AND RUNNING A CONSUMER OR

ENVIRONMENTAL ORGANISATION CAN HELP THE /-) TO KEEP GOING AND TO
GROW 3UCH ORGANISATIONS SHOULD BE AN INHERENT PART OF THE NETWORK
!FTER SOME TIME THE /-) SHOULD ALSO START TO BUILD UP A NETWORK
WITH OTHER /-)S AND FARMS !LSO THE FRIENDLY CONTACT WITH COMPETI
TORS CAN BE VERY BENElCIAL FOR THE /-)
!DAPTING THE NETWORK SHOULD NOT PROVE TOO DIFlCULT (OWEVER SPECIAL ATTENTION
NETWORKING IS ESSENTIAL FOR THE /-) AND THEREFORE SPECIAL ATTENTION TO PRESS
SHOULD ALWAYS BE GIVEN TO THE PRESS AND MEDIA ASSOCIATIONS OR OR AND MEDIA
GANISATIONS SUPPORTERS IN THE IMMEDIATE BUSINESS ENVIRONMENT
BUSINESSES AND PRIVATE SUPPORTERS
!DAPTATION OF ORGANISATIONAL STRUCTURES AND MANAGEMENT

)N THE COURSE OF ESTABLISHING AN /-) CONTINUOUS ADAPTATION OF THE
ORGANISATIONAL STRUCTURE IS NECESSARY 4HE ORGANISATIONAL STRUCTURE
INITIALLY SELECTED MAY BE BENElCIAL FOR THE START UP PHASE BUT IT IS
@"RIO%COR )TALY
#ORPORATE ENGINEERING FUSION AND INCORPORATION IN ORDER TO COPE
WITH GROWTH CRISIS
4HE "RIO )NITIATIVE WAS ESTABLISHED AT THE BEGINNING OF THE S AS
THE RESULT OF A MERGER OF VARIOUS PIONEERING ORGANIC CO OPERATIVES
IN 6ENETO MAINLY OPERATING IN THE FRUIT AND VEGETABLE MARKET 4HEY
DECIDED TO MERGE DUE TO A GROWTH CRISIS RESULTING FROM INSTITUTIONALI
SATION OF THE ORGANIC MARKET IN )TALY )N ORDER TO SUPPLY SUPERMARKETS
NEW FORMS OF LOGISTICS AND QUALITY ASSURANCE SYSTEMS NEEDED TO BE
ESTABLISHED AND THE NEED FOR INVESTMENT CAPITAL LED SOME OF THESE
COMPANIES TO MERGE AND THEN TO BECOME INCORPORATED AS "RIO
3IMILARLY %COR ANOTHER /-) WAS ESTABLISHED IN THE SAME PERIOD IN
ORDER TO REDUCE THE COSTS OF WHOLESALE DISTRIBUTION TO SPECIALISED
ORGANIC SHOPS AND WAS THE RESULT OF A MERGER OF CO OPERATIVES AND
A LIMITED COMPANY )T IS NOW THE LARGEST WHOLESALER FOR SPECIALISED
ORGANIC SHOPS IN )TALY COVERING BOTH FRESH PRODUCTS FRUITS AND VEGETA
BLES DAIRY MEAT FRESH MADE PASTA ETC AND DRY COMMODITIES
"OTH /-)S GAINED MORE MARKET POWER BUT ARE STILL FACING STRONG COM
PETITION IN THE MARKETPLACE
3OURCE 5NIVERSIT¸ 0OLITECNICA DELLE -ARCHE !NCONA )TALY

POSSIBLE THAT THE /-) WILL DEVELOP MUCH BETTER IN FUTURE WITH AN
OTHER ORGANISATIONAL STRUCTURE 4HIS MAY BE THE CASE FOR EXAMPLE
IF CO OPERATION PARTNERS CHANGE OR THE /-) IS GROWING QUICKLY AND
MANY CO OPERATION PARTNERS JOIN THE /-) !NALYSIS OF THE /-) RE
FERRED TO AT THE BEGINNING OF THIS CHAPTER WILL ALSO SHOW WHETHER THE
ORGANISATIONAL STRUCTURE IS WORKING WELL OR IF MODIlCATION SHOULD BE
UNDERTAKEN
4HE ANALYSIS OF /-)S IN %UROPE CONDUCTED AS PART OF THE

CHECK THE /-)A2$ PROJECT SHOWED THAT THE BIGGEST PROBLEMS EXPERIENCED BY
MANAGEMENT /-)S ARE MANAGEMENT RELATED -ANAGEMENT IS ONE IMPORTANT REA
SON FOR FAILURE AMONG /-)S
!FTER A PERIOD OF ONE OR TWO YEARS IT SHOULD BE OBVIOUS WHETHER
THE MANAGEMENT IS DOING A GOOD JOB OR NOT )F ANALYSIS OF THE /-)
SHOWS THAT EVERYTHING IS GOING WELL AND THERE ARE NO BIG PROBLEMS
THERE IS NO NEED TO MAKE BIG CHANGES )F ON THE OTHER HAND THE
ANALYSIS SHOWS SERIOUS PROBLEMS THEN MANAGEMENT MAY BE A REASON
)N A STRATEGIC MEETING WITH ALL RELEVANT PEOPLE FOR THE SUCCESS OF
THE /-) THERE SHOULD BE A DISCUSSION ON THE KIND OF MANAGEMENT
CHANGES THAT MAY BE NECESSARY $OES @THE PROBLEM LIE WITH THE WHOLE
MANAGEMENT OR WITH ONE INDIVIDUAL PERSON )T IS POSSIBLE THAT THE
WHOLE MANAGEMENT MAY BE GOING IN THE WRONG DIRECTION 2EASONS
MIGHT THEREFORE BE
Q OBJECTIVES n THE MANAGEMENT IS NOT WORKING WITH THE AIM OF

ACHIEVING THE OBJECTIVES
Q NO CLEAR DELINEATION OF THE TASKS OF THE INDIVIDUAL MEMBERS OF
THE MANAGEMENT
Q LACK OF TRUST AND OPENNESS AMONG THE MEMBERS OF THE MANAGE
MENT
Q LACK OF COMMUNICATION WITHIN THE /-)
Q LACK OF MANAGEMENT SKILLS
)N ORDER TO PREVENT A FAILURE OF THE /-) DUE TO MANAGEMENT

THE MANAGERS SHOULD IMPROVE THEIR SKILLS AS MUCH AS POSSIBLE 3PECIAL
MANAGEMENT TRAINING COURSES CAN ASSIST MANAGERS TO DEVELOP THEIR
SKILLS

-ATURING PHASE

-ORE EFlCIENT BUSINESS STRUCTURE AND MANAGEMENT
)N THIS ORGANIC HERB COMPANY RE EVALUATED ITS WAY OF DOING
BUSINESS "EFORE THIS THE COUPLE WHO OWNED THE BUSINESS MADE
ALMOST ALL DECISIONS ALONE AND ECONOMIC CRITERIA PLAYED LESS OF A ROLE
.OW THE COMPANY HAS A BUSINESS MANAGER A PRODUCT MANAGER AND
A lNANCIAL MANAGER )N ADDITION THEY HAVE TWO PERSONS RESPONSIBLE
FOR RAW MATERIAL SUPPLIES !LTHOUGH THE COMPANY HAS ABOUT
EMPLOYEES THEY STILL HAVE DAILY MEETINGS AROUND THE COFFEE TABLE
4HE NEW STRUCTURE HELPED THE BUSINESS PROCESSES AND NOW DECISIONS
CAN BE MADE IN A MORE EFlCIENT MANNER !LL IMPORTANT DECISIONS ARE
MADE TOGETHER !T THE SAME TIME THE COMPANY DECIDED THAT ALL NEW
INVESTMENTS MUST BE IMPLEMENTED WITH COMPANY CASH mOW OR ASSETS
INSTEAD OF THE OWNERS OWN CAPITAL
2EALLOCATION OF HUMAN AND lNANCIAL RESOURCES

!S THE /-) GROWS THERE WILL USUALLY BE A NEED TO REALLOCATE STAFF OR CHECK THE
EVEN HIRE NEW PEOPLE &OR THIS REASON THE REALLOCATION OF HUMAN RE HUMAN RESOURCES
SOURCES IS ALSO VERY IMPORTANT FOR THE /-)
4HE REALLOCATION OF HUMAN RESOURCES MEANS THAT THE /-) AS
CERTAINS WHETHER @NEW OR @OTHER HUMAN POTENTIAL IS NECESSARY )F THE
/-) IS GROWING THERE MAY BE A NEED FOR A SPECIAL SALES MANAGER WHO
IS SOLELY IN CHARGE OF PRODUCT SALES )T SHOULD BE CLEAR THAT ONE PERSON
CANNOT DO EVERYTHING )T WILL BE MORE EFFECTIVE IF TASKS ARE DISTRIBUTED
ACCORDING TO THE SKILLS OF THE EMPLOYEES
)T IS ALWAYS DIFlCULT TO DISMISS AN INCOMPETENT EMPLOYEE OR
MANAGER &OR THIS REASON A FAIR PROCESS OF EMPLOYEE EVALUATION IS
IMPORTANT )T CAN BE VERY HELPFUL IF THE EMPLOYEES OR MANAGERS GIVE
FEEDBACK ON A REGULAR BASIS !NY PROBLEMS SHOULD BE IDENTIlED ALONG
WITH A PROPOSED SOLUTION AGREEABLE TO THE EMPLOYEEMANAGER AND THE
PARTNERS OF THE /-)
&INALLY lNANCIAL RESOURCES ARE ONE OF THE MOST IMPORTANT CRITI

CAL POINTS WITHIN THE DEVELOPMENT OF THE /-) -OST /-)S HAVE A

@"IOLAIT &RANCE
$EVELOPMENT OF HUMAN RESOURCE MANAGEMENT WITH EXTERNAL
ADVICE
)N TERMS OF SOCIAL CONCERNS AND NEEDS IN "IOLAIT HAD TO DEAL
WITH A PERIOD OF RAPID @HUMAN GROWTH 4HIS WAS A SIGN OF THE BUSI
NESSS SUCCESS BUT WAS ALSO SYNONYMOUS WITH A STATE OF CONSTANT
mUX GROWTH IN THE NUMBER OF PRODUCER MEMBERS CONTINUOUS RE
CRUITMENT OF LORRY DRIVERS INCREASE IN ADMINISTRATIVE STAFF ETC &OR
THIS REASON IN "IOLAIT DECIDED TO SEEK ADVICE AND CALLED IN AN
ADVISER SPECIALISED IN HUMAN RESOURCES MANAGEMENT "IOLAIT AIMED
AT PROVIDING THE BEST INTEGRATION POSSIBLE FOR EVERY EMPLOYEE WITHIN
THE STRUCTURE AFTER THIS DIAGNOSIS IT WAS NOTICED THAT MOST OF THESE
EMPLOYEES UNDERSTOOD AND SHARED THE PRODUCERS GROUP OBJECTIVES
3OURCE ).2! ,E -ANS &RANCE
NEED FOR SIZEABLE INVESTMENTS DURING THEIR DEVELOPMENT FOR EXAMPLE

CHECK THE STORE ROOMS EMPLOYEES ETC .ORMALLY THESE INVESTMENTS CANNOT
lNANCIAL BE lNANCED OUT OF THE /-)S OWN CAPITAL -ANY /-)S ALREADY START
RESOURCES WITH HIGH DEBTS /NE IMPORTANT OBJECTIVE FOR THESE /-)S SHOULD BE
TO REDUCE THEIR DEBTS AS SOON AS POSSIBLE AND PREVENT NEW DEBTS FROM
ACCUMULATING /NCE AGAIN IT IS APPROPRIATE TO REITERATE OUR WORDS OF
CAUTION AS REGARDS GOVERNMENT AID !FTER A SHORT AND SOMETIMES UN
FORESEEABLE TIME GOVERNMENT AID MAY COME TO AN END AND lNANCIAL
DIFlCULTIES CAN ARISE AS A RESULT 'OVERNMENT AID SHOULD THEREFORE BE
USED AS AN ADDITIONAL RESOURCE AND NOT AS PART OF THE lNANCING OF THE
/-)
&OR REALLOCATING lNANCIAL RESOURCES THE lNANCIAL PART OF THE
BUSINESS PLAN IS VERY HELPFUL !NALYSIS OF THIS PLAN SHOULD SHOW
WHETHER THERE ARE lNANCIAL PROBLEMS TO BE EXPECTED AND WHERE THOSE
lNANCIAL PROBLEMS ARE LIKELY TO BE FOUND )N MOST CASES HIGH COSTS ARE
THE REASON FOR lNANCIAL PROBLEMS OF THE /-) 4HE ITEMS INVOLVING
THE HIGHEST EXPENDITURE ARE MAINLY PERSONNEL COSTS AND DEBTS )N AD
DITION UNSATISFACTORY SALES CAN BE A REASON FOR lNANCIAL PROBLEMS
)T SHOULD BE CLEARLY IDENTIlABLE WHERE THE SOURCES OF THE HIGH COSTS
ARE 5NSATISFACTORY SALES FOR EXAMPLE ARE OFTEN THE CONSEQUENCE OF
INADEQUATE MARKET RESEARCH OR INSUFlCIENT INVESTMENT IN MARKETING
3OME /-)S ARE INCLINED TO SQUEEZE THE MARKETING BUDGET AS SOON

-ATURING PHASE
AS lNANCIAL PROBLEMS EMERGE 4HE THOUGHT BEHIND THIS IS PROBABLY

THAT MARKETING IS NOT THAT IMPORTANT 5NFORTUNATELY THIS ASSUMPTION
IS COMPLETELY WRONG 4O REDUCE THE MARKETING BUDGET WILL PROBABLY
LEAD TO A DECLINE IN SALES AND THIS IN TURN LEADS TO A SMALLER TURNOVER
WHICH CAN ONLY EXACERBATE lNANCIAL PROBLEMS
4O ANALYSE THE lNANCIAL SITUATION AND THE REASONS FOR POSSIBLE
lNANCIAL PROBLEMS COLLEGES AND UNIVERSITIES CAN BE VERY HELPFUL
3UCH AN ANALYSIS WILL SHOW WHETHER AND HOW THE lNANCIAL RESOURCES
MUST BE REALLOCATED (OWEVER IT SHOULD BE CLEAR THAT THE lRST PRIORITY
OF THE /-) IS TO MAINTAIN LIQUIDITY
%VALUATION OF AN ESTABLISHED /-)
ANALYSIS OF BIGGER PROBLEMS

CONTINUOUSLY SEARCH FOR REASONS
THE /-)
IF NECESSARY ADAPTATION
OF
OBJECTIVES
CONCEPTS
NO BIGGER PROBLEMS ORGANISATIONAL STRUCTURE
MANAGEMENT
HUMAN RESOURCES
FINANCIAL RESOURCES
STRATEGIC
ANALYSIS
BY MONITORING
OF THE FURTHER
YEARLY
DEVELOPMENT
OF THE /-)
OBJECTIVES
CONCEPTS
ORGANISATIONAL STRUCTURE
MANAGEMENT
HUMAN RESOURCES
FINANCIAL RESOURCES
&IGURE 3TEPS FOR THE EVALUATION OF AN ESTABLISHED /-)

+EY FACTORS FOR SUCCESS
)N #HAPTER THE AUTHORS SHOWED IN A SERIES OF CHRONOLOGICAL

STEPS HOW TO PREPARE START AND SUCCESSFULLY OPERATE AN /-) WITHIN A
CHANGING MARKET ENVIRONMENT -ETHODS AND FACTORS WERE DESCRIBED
WHICH SEEM TO BE THE MOST RELEVANT FOR SUCCESS 4HESE WERE DERIVED
FROM THE ANALYSIS OF NUMEROUS SUCCESSFUL AND FAILED /-)S IN %U
ROPE
2EGARDLESS OF NATIONAL MARKETS NATIONAL POLITICAL FRAMEWORKS

PRODUCTS PRODUCED AND SOLD OR TYPES OF CO OPERATION IT BECAME OB
VIOUS THAT A CERTAIN NUMBER OF PREDOMINANT FACTORS EXPLAIN THE SUC
CESS OR FAILURE OF /-)S )F RELEVANT FACTORS ARE NOT SUFlCIENTLY TAKEN
INTO ACCOUNT THERE IS A HIGH RISK THAT AN /-) WILL NOT SURVIVE IN THE
LONG TERM )F /-)S ARE ONLY VIABLE DURING THE TIME WITHIN WHICH THEY
RECEIVE SUBSIDIES SOMETHING IS WRONG !LSO IF AFTER MANY YEARS OF
OPERATION PRODUCTION IS STILL MORE IMPORTANT THAN CUSTOMER AND
MARKET ORIENTATION AN /-) WILL FACE DIFlCULTIES
4HIS CHAPTER SUMMARISES AND HIGHLIGHTS THOSE KEY FACTORS

WHICH INmUENCE THE OPERATIONS OF AN /-) SEE lGURE "ECAUSE
MOST OF THE FACTORS WERE DESCRIBED IN DETAIL IN CHAPTER THE INTENTION
OF THIS CHAPTER IS SIMPLY TO IDENTIFY THE MOST IMPORTANT FACTORS AND TO
EXPLAIN THEIR ROLES IN THE PROCESS OF MARKETING PLANNING

3UCCESS FACTORS ARE DIVIDED FOR THE PURPOSES OF THIS CHAPTER

INTERNAL AND INTO INTERNAL AND EXTERNAL FACTORS )NTERNAL FACTORS CAN BE DIRECTLY
EXTERNAL FACTORS INmUENCED BY /-) MEMBERS %XTERNAL FACTORS CAN BE CONSIDERED AS
OF SUCCESS THE FRAMEWORK OF OPPORTUNITIES FOR AND THREATS TO AN /-) AND DE
TERMINE THE DIRECTION AND VOLUME OF STRATEGIC OPTIONS
0UBLIC FUNDING AND SUPPORT
0ROFESSIONAL
MANAGEMENT
+EY PERSONS
%CONOMIES OF SCALE
-ARKET ENVIRONMENT
#LEAR OBJECTIVES
2EGIONAL CONTEXT
AND STRATEGIC PLANNING
-ARKET RESEARCH
)NTERNAL SUCCESS FACTORS
-OTIVATION
"RANDS AND COMPETENCE
BRAND OWNERSHIP
0OTENTIAL )NNOVATION
OF NETWORKING
!CCEPTANCE OF
STRATEGIC TURNING POINTS
%XTERNAL SUCCESS FACTORS
&IGURE +EY FACTORS OF SUCCESS FOR /RGANIC -ARKETING )NITIATIVES
&OR A DEEPER INSIGHT SEE THE /-)A2$ 0UBLICATIONS

3YLVANDER "+RISTENSEN .( /RGANIC -ARKETING )NITIATIVES IN %UROPE
6OLUME
3CHMID /3ANDERS *-IDMORE 0 /RGANIC -ARKET )NITIATIVES AND 2URAL
$EVELOPMENT 6OLUME
5NIVERSITY OF 7ALES 3CHOOL OF -ANAGEMENT AND "USINESS !BERYSTWYTH 5+
HTTPWWWIRSABERUKOMIARDPUBLICATIONSINDEXHTML

)NTERNAL FACTORS
)NTERNAL FACTORS
4HE ROLE OF KEY PERSONS

-ANY STUDIES EXAMINING THE SUCCESS OR FAILURE OF MARKETING INITIA
TIVES SHOW THAT THE HUMAN FACTOR IS CLEARLY MORE IMPORTANT THAN MAR
KET POLITICAL OR ECONOMIC CONDITIONS
-ARKET POTENTIAL WILL REMAIN USELESS TO AN /-) IF ONE OR A FEW
MEMBERS ARE UNABLE TO REALISE AND EXPLOIT IT 4HESE PEOPLE ARE CALLED
THE KEY PERSONS OF AN /-) 4HEY HAVE A LEADERSHIP ROLE WITHIN AN
/-) AND PERHAPS EVEN ALSO IN THE REGION WITHIN WHICH THE /-)
OPERATES
+EY PERSONS ARE INDIVIDUALS WHO HAVE OUTSTANDING PERSONAL REQUIRED
SKILLS 4HEY HELP AN /-) TO GET STARTED TO NEGOTIATE SUCCESSFULLY WITH PERSONAL SKILLS
BUSINESS PARTNERS AND EVEN TO SURVIVE IN DIFlCULT SITUATIONS 4HEY ARE
ABLE TO MOTIVATE /-) MEMBERS AND LEAD AN /-) TO BECOME A WELL
KNOWN REGIONAL OR NATIONAL INSTITUTION
)N THE BEST CASE SCENARIO KEY PERSONS KNOW THE AGRICULTURAL
PROCESSING ANDOR RETAILING SECTORS VERY WELL 4HIS CROSS SECTORAL
KNOW HOW NOT ONLY HELPS IN TERMS OF UNDERSTANDING THE MARKET
PARTNERS BUT IS ALSO USEFUL IN PHASES OF NEGOTIATION WITH MARKET
PARTNERS AS WELL AS IN THE INTERNAL AND EXTERNAL COMMUNICATION OF
AN /-)
+EY PERSONS SHOULD HAVE MANY OF THE FOLLOWING SKILLS 4HEY

SHOULD BE ABLE
Q TO MAINTAIN THEIR INTEGRITY AND HONESTY AND BE OPEN MINDED

Q TO RECOGNISE BENElCIAL MARKET POTENTIALS FOR AN /-)
Q TO THINK GENERALLY AND STRATEGICALLY AS OPPOSED TO SPECIlCALLY
EGOCENTRICALLY OR ONLY OPERATION ORIENTED
Q TO PERSUADE OTHER PEOPLE
Q TO SOLVE PROBLEMS AND BE ABLE TO MAKE DECISIONS IN COMPLEX
RISKY CONmICT RIDDEN AND DIFlCULT SITUATIONS
Q TO PERSUADE PEOPLE OR INSTITUTIONS THAT SUPPORT AND PROMOTE
THE /-)S DEVELOPMENT OF ITS BENElTS
Q TO COMMUNICATE WITH RELEVANT STAKEHOLDERS AND UNDERSTAND
THEIR REQUIREMENTS
Q TO COMMUNICATE WITH MEDIA IN MEDIA LANGUAGE AND UNDER
STAND THEIR REQUIREMENTS

Q TO PUSH DEVELOPMENTS IN WORKING GROUPS FOR PRODUCT DEVE

LOPMENT INITIATING EVENTS IN ORGANISATIONAL MATTERS
Q TO ANALYSE MARKETS AND COMPETITORS AND DRAW UP STRATEGIC RE
COMMENDATIONS
Q TO INTEGRATE PEOPLE AND DIFFERENT OPINIONS
0SYCHOLOGICAL AND SOCIAL STUDIES SHOW THAT THERE IS NO ONE IDEAL

TYPE OF KEY PERSON 4HERE IS ALSO NO SUPERMAN OR SUPERWOMAN WHO
HAS ALL THESE SKILLS (OWEVER THE MORE COMMUNICATIVE CREATIVE AND
ABLE A PERSON IS TO RECOGNISE INTERESTING POTENTIAL THE MORE LIKELY IT IS
THAT SUCH A PERSON WILL BE ABLE TO LEAD AN /-) TO SUCCESS
+EY PERSONS SHOULD LEAD THE /-) THEMSELVES OR AT LEAST BECOME
A BOARD MEMBER )T IS IMPORTANT THAT KEY PERSONS ARE ENGAGED ON A
LONG TERM BASIS )F A KEY PERSON IS lNANCED ONLY BY TEMPORARY PUBLIC
SUPPORT THE /-) MIGHT FACE SEVERE PROBLEMS WHEN THAT PERSON CAN
NO LONGER BE lNANCED AFTER SUBSIDIES HAVE STOPPED
(OWEVER THERE IS ALSO A DANGER IN LEAVING ALL DECISIONS AND
SHARED CRUCIAL TASKS TO ONE KEY PERSON )N THE EVENT OF THIS PERSON LEAVING
LEADERSHIP THE /-) THE /-) IS IN DANGER OF LOSING NOT ONLY IMPORTANT KNOW
HOW BUT ALSO ESSENTIAL INTERNAL AND EXTERNAL NETWORK SYSTEMS THAT
THEY HAVE BEEN BUILT UP )T IS THEREFORE WISE FOR KEY PERSONS NOT TO BE
LEFT WORKING INDEPENDENTLY IN A LEADING ROLE ,EADERSHIP SHOULD BE
SHARED BY SEVERAL PEOPLE INCLUDING THE BOARD
4HE ROLE OF MANAGEMENT

7HEN LOOKING AT /-)S WHICH HAVE FAILED OR HAVE ECONOMIC PROBLEMS
THE FOLLOWING WEAK POINTS WERE IDENTIlED
WEAK Q A BOARD WITH WEAKNESSES IN DECISION MAKING

MANAGEMENT Q UNCLEAR OR OVERLAPPING DECISION MAKING COMPETENCES
FACTORS Q A BOARD WITH FALSE MARKET EXPECTATIONS
Q NO RISK MANAGEMENT SCENARIOS AVAILABLE FOR COMPLETELY NEW
MARKET CONSTELLATIONS FOR EXAMPLE NEW COMPETITORS APPEAR ON
THE MARKETS LOSING CONTRACTS TO MAIN MARKET PARTNER
Q LESS DEVELOPED OR IMPLEMENTED MONITORING AND CONTROL SYS
TEMS GAPS IN KNOWLEDGE ABOUT OWN MARKET PERFORMANCE AND
COST PARAMETERS
!LL THE ABOVE FACTORS ARE VERY SIMILAR TO POSSIBLE FACTORS FACING
/-)S AND ARE LINKED TO THE SCOPE STRUCTURE AND HUMAN FACTORS OF

)NTERNAL FACTORS
@!LCE .ERO )TALY

0ERSONALITY OF THE FOUNDER AS A DRIVING FORCE
'INO 'IROLOMONI WAS THE FOUNDER AND PRESIDENT IN PERPETUITY OF !LCE
.ERO )N HE WAS ELECTED MAYOR OF THE VILLAGE OF )SOLA DEL 0IANO
WHERE HE REALISED THAT CONVENTIONAL AGRICULTURE WAS UNABLE TO SOLVE
THE ISSUES OF RURAL DEVELOPMENT IN MOUNTAINOUS AREAS )N HE
STARTED TO INVOLVE HIMSELF IN ORGANIC FARMING LEADING TO THE FOUNDA
TION IN OF !LCE .ERO AT THE -ONASTERY OF -ONTEBELLO A FEW MILES
WAY FROM )SOLA DEL 0IANO ON THE TOP OF A HILL
!LCE .EROS SUCCESSES AND FAILURES ARE ALL ACCOUNTABLE TO 'INOS
PASSIONATE AND VISIONARY PERSONALITY 'INO HAS A LARGE NETWORK OF
CULTURAL PHILOSOPHICAL AND POLITICAL ACQUAINTANCES WHICH MAKES !LCE
.ERO A UNIQUE ENTREPRENEURIAL AND CULTURAL EXPERIENCE
'INO COUPLES A STRONG CHARISMATIC AND FASCINATING PERSONALITY WITH
AN INDIVIDUALISTIC AND STUBBORN CHARACTER WHICH RAISES MIXED FEELINGS
AMONG HIS COUNTERPARTS SOME ADORE HIM BUT HE HAS ALSO GATHERED
MANY ENEMIES !LCE .ERO NOWADAYS IS A @FAMILY CO OPERATIVE WHERE
FAMILY BONDS ARE VERY STRONG AND EVIDENT (IS VISIONARY IDEALS ARE
STRONGLY MIXED WITH HIS DEEP ECOLOGY #ATHOLICISM VERY CLOSE TO THE
TEACHING OF 3T &RANCIS OF !SSISI AND THE )TALIAN THEOLOGIAN 3ERGIO
1UINZIO TO THE POINT THAT !LCE .ERO IN HIS OWN WORDS REPRESENTS HIS
@LIFE LONG PRAYER
MANAGEMENT 4HIS HIGHLIGHTS THE CRUCIAL ROLE OF THE PROCESS OF MAN

AGEMENT PLANNING AND IMPLEMENTATION
'ENERALLY A DISTINCTION MUST BE MADE BETWEEN @HARD AND @SOFT

MANAGEMENT SKILLS 3OFT SKILLS ARE RELATED TO THE ABILITIES AND SKILLS OF @HARD AND @SOFT
PEOPLE MANAGERS (ARD SKILLS ARE RELATED TO TECHNICAL AND ORGANISA MANAGEMENT
TIONAL METHODS OF MANAGEMENTPROJECT PLANNING AND IMPLEMENTA SKILLS
TION 4HESE MANAGEMENT SKILLS AND ABILITIES INmUENCE EACH OTHER
/FTEN SOFT SKILLS FOR EXAMPLE THE ABILITY TO LEAD PEOPLE TO COM
MUNICATE INTEGRATE OR NEGOTIATE SUCCESSFULLY SEEM TO INmUENCE THE
SUCCESS OF AN /-) MORE THAN THE THEORETICAL ABILITY TO CONTROL ALL
RELEVANT METHODS OF TIME SCHEDULING BUDGET PLANNING OR BUDGET
CONTROLLING

/-) MANAGERS MUST MANAGE INTERNAL HUMAN RESOURCES AS WELL

MANAGEMENT AS RELATIONSHIPS WITH EXTERNAL PARTNERS AND STAKEHOLDERS 4O DO THIS
OF HUMAN CLOSE PERSONAL RELATIONSHIPS AND CONTACT BETWEEN THE MANAGEMENT
RESOURCES BOARD /-) MEMBERS AND /-) MARKET PARTNERS MUST BE DEVELOPED
FROM THE START /FTEN AN /-)S EFlCIENT @NETWORKING IS MORE PRODUC
TIVE THAN HIGHER PRODUCTION OUTPUT
-OST IMPORTANTLY IT IS ESSENTIAL THAT /-) MEMBERS AND /-)

/-) MEMBERS PARTNERS PURSUE THE SAME PRINCIPAL OBJECTIVES AND SHARE MUTUAL
AND PARTNERS SOLIDARITY EVEN IF THEY DO NOT NECESSARILY ALWAYS SHARE EVERY SINGLE
SHOULD SHARE THE IDEA /PPORTUNISTIC BEHAVIOUR ON THE PART OF INDIVIDUAL MEMBERS OR
SAME PRINCIPAL PARTNERS COULD LEAD TO PERMANENT CONmICT BETWEEN MEMBERS AND CO
OBJECTIVES OPERATION PARTNERS AND AS AN ULTIMATE CONSEQUENCE LEAD TO A SEVERE
CRISIS OR FAILURE OF AN /-) !LSO MANAGEMENT SHOULD HAVE THEORETI
CAL PLANS IN PLACE FOR THE EVENTUALITY OF CONmICT ARISING BETWEEN INDI
VIDUAL PARTNERS OR /-) MEMBERS
4HE ABILITY TO RUN A MONITORING AND CONTROL SYSTEM IS ONE OF

MONITORING AND THE MAIN @HARD SKILLS THAT MANAGERS SHOULD POSSESS 4HE ELEMENTS
CONTROL CONCEPTS INCLUDED IN A CONTROL SYSTEM EG MARKETING MEASURES OR COST EF
lCIENCY CAN BE FOUND IN #HAPTER #ONTROL AND MONITORING
@!GRI"IO 5NION &RANCE

4HE INITIATORS GOOD KNOWLEDGE OF FOREIGN MARKETS AS A SUCCESS
FACTOR
!GRI"IO 5NION IS LOCATED IN THE SOUTH WEST OF &RANCE AND IS SPECIA
LISED IN ORGANIC CEREALS ESPECIALLY CEREALS FOR STORAGE )T WAS CREATED
IN AND BRINGS TOGETHER MORE THAN ORGANIC CEREAL GROWERS
4HE FOUNDER AND KEY PERSON OF THIS CO OPERATIVE WAS AN EXPERT IN FOR
EIGN MARKETS FOR CEREALS WITH SOUND KNOWLEDGE OF 'ERMAN AND )TA
LIAN MARKETS FOR MANY YEARS #ONTACT TO THESE FOREIGN CLIENTS ENABLED
HIM TO GET TO KNOW AND FULlL THEIR REQUIREMENTS DEADLINES QUALITY
GRAIN PURITY HYGROMETRY !LL THIS PROVIDED HIM WITH GOOD TECHNICAL
KNOWLEDGE AND GAVE HIM A GOOD REPUTATION IN &RANCE
4HIS KEY PERSON IS STILL A PRODUCER WHICH ENABLES HIM TO REMAIN IN
TOUCH WITH PRODUCTION DIFlCULTIES OR OPPORTUNITIES AND OBSTACLES
THAT NEED TO BE OVERCOME 3OURCE ).2! ,E -ANS &RANCE

)NTERNAL FACTORS
@"IO2EGIONAL 'ERMANY
0ART TIME MANAGEMENT WITHOUT REMUNERATION
"IO2EGIONAL IS A CO OPERATIVE VENTURE ESTABLISHED BY ORGANIC FARMERS
AND GARDENERS NEAR -UNICH TO SELL THEIR VEGETABLES TOGETHER 4HE /-)
WAS FOUNDED IN BY lVE ORGANIC VEGETABLE PRODUCERS 4ODAY
ORGANIC VEGETABLE PRODUCERS AND THREE WHOLESALERS WORK TOGETHER
IN PLANNING SUPPLY AND DELIVERY 4HEY ARE ABLE TO SELL OF THEIR
PRODUCTS REGIONALLY
4HE MANAGEMENT OF THE /-) IS CARRIED OUT WITHOUT REMUNERATION
BY TWO FARMERS 4HESE FARMERS CAN ONLY UNDERTAKE THE MANAGEMENT
TASKS IN A LIMITED WAY 4HIS IS A SOURCE OF MANY PROBLEMS WITHIN THE
/-) 3OURCE 5NIVERSITY OF +ASSEL 'ERMANY
CONCEPTS SHOULD BE CONSIDERED AS AN ESSENTIAL INSTRUMENT FOR THE

PERMANENT EVALUATION AND STEERING OF THE DEVELOPMENT PROCESSES
WITHIN AN /-) 4HIS IS AN IMPORTANT TASK FOR MANAGEMENT TO CARRY
OUT REGULARLY 4HE BOARD ALSO HAS A RESPONSIBILITY TO SUPERVISE THIS
PROCESS AND CONSIDER THE RESULTS
+EEP IN MIND THAT REGULAR COMPARISONS BETWEEN STRATEGIC l
NANCIAL AND MARKETING OBJECTIVES ARE ESSENTIAL ELEMENTS OF THE MONI
TORING CONCEPT 4HE PRECONDITIONS FOR THIS ARE CLEAR OBJECTIVES THAT
CAN BE QUANTIlED AND MEASURED INDICATORS OF SUCCESS
#ONTROLLING OR MONITORING SHOULD ANSWER THE FOLLOWING QUES

TIONS POSED BY A MANAGER
Q 7ERE THE PLANNED MEASURES IMPLEMENTED IN THE DElNED PERIOD

7ERE THERE DELAYS 7HAT WAS THE REASON FOR DELAYS 7ERE THERE
ORGANISATIONAL OR PRACTICAL BARRIERS TO IMPLEMENTING THE MEA
SURES
Q 7HAT IS THE IMPACT OF THE MEASURES POSITIVE NEGATIVE AS
PLANNED NOT AS PLANNED
Q 4O WHAT EXTENT HAVE OBJECTIVES BEEN MET
Q (AVE THE EXPECTED BENElTS FOR /-) MEMBERS AND PARTNERS
BEEN ACHIEVED
Q 7HAT ADAPTATIONS OF THE OBJECTIVES SHOULD BE CONSIDERED AND
WHICH OF THESE CAN BE REALISED

)F THE ANSWERS TO THESE QUESTIONS INDICATE THAT THE MAIN

OBJECTIVES MAY NOT BE ACHIEVED THERE IS AN URGENT NEED TO IDENTIFY
THE REASONS AND TO ADOPT OR RE ORIENTATE EXISTING OBJECTIVES
,AST BUT NOT LEAST THE MONITORING AND CONTROL MEASURES MUST
INCLUDE THE PERMANENT OBSERVATION OF AN /-)S PROlTABILITY )F
PROlTABILITY RATES START TO DECREASE THE REASONS FOR THIS SHOULD BE
ANALYSED 0ERMANENTLY CONTROLLING PROlTABILITY AND LIQUIDITY HELPS TO
PREVENT IRREVERSIBLE lNANCIAL DIFlCULTIES
4HE IMPORTANCE OF STRATEGIC PLANNING AND CLEAR OBJECTIVES

/BJECTIVES SHOULD BE ORIENTATION POINTS FOR THE DIRECTION AND STRUC
OBJECTIVES HAVE TURE OF ALL STRATEGIES AND ACTIVITIES PLANNED BY AN /-) 4HEY NOT ONLY
TO BE DElNED HAVE TO INCLUDE ECONOMIC GOALS BUT ALSO SOCIAL ENVIRONMENTAL AND
PRECISELY IMAGE RELATED OBJECTIVES 4HE MORE PRECISELY AND MORE QUANTITATIVELY
OBJECTIVES ARE DElNED THE EASIER IT IS TO CONTROL THE LEVEL OF SUCCESS OF
AN OPERATING /-)
3TRATEGIES SHOW HOW OBJECTIVES CAN BE IMPLEMENTED IN DAILY
ALSO COMPETITOR BUSINESS (ENCE WHEN THE PHASE OF DElNING AN /-)S OBJECTIVES
STRATEGIES SHOULD HAS BEEN COMPLETED THE NEXT STEP IS TO CONSIDER WHICH STRATEGIES ARE
INmUENCE THE GENERALLY HELPFUL IN ACHIEVING THESE OBJECTIVES .OT ONLY SHOULD AN
OWN STRATEGY /-)S OBJECTIVES DRIVE THE SELECTION OF STRATEGIES USED 4HE STRATEGIES
SELECTION OF THE MAIN COMPETITORS SHOULD ALSO HAVE AN IMPORTANT INmUENCE ON
STRATEGIC DECISIONS
!S FOR THE DElNITION OF /-) OBJECTIVES A GROUP OF LEADING /-)

MEMBERS SHOULD CONSIDER AND JOINTLY DECIDE ELEMENTARY STRATEGIC
POINTS 4O IDENTIFY SUITABLE STRATEGIES IT MAY ALSO BE HELPFUL TO INCLUDE
AN EXTERNAL EXPERTS POINT OF VIEW
-ARKET STUDIES ANALYSIS OF SECTOR REPORTS A TELEPHONE CALL TO
POTENTIAL MARKET PARTNERS OR A MEETING WITH AN EXTERNAL CONSULTANT
CAN HELP TO IDENTIFY STRATEGIES TO BE INCLUDED OR EXCLUDED
&OR MORE DETAILED INFORMATION ABOUT THE STRATEGIC PLANNING
PROCESS REFER TO #HAPTER
4HE ROLE OF MOTIVATION AND COMPETENCE

MAINTAINING THE -OTIVATION IS AN ESSENTIAL FACTOR AND IS VERY IMPORTANT IN THE PRE
MOTIVATION OF START AND START UP PHASES !T THIS TIME THE DRIVING FORCE COMES FROM
MEMBERS AND THE INITIATORS MAINLY FARMERS )T IS IMPORTANT TO NOTE THAT IN MANY
STAFF /-)S THE MOTIVATION OF THE INITIALPIONEER PHASE CAN DIMINISH ES

)NTERNAL FACTORS
PECIALLY IF THE PRODUCER PRICE IS NOT SIGNIlCANTLY HIGHER THAN IN THE

CASE OF USING OTHER DISTRIBUTION CHANNELS (OWEVER IF THE INITIATIVE
FOLLOWS A PREMIUM QUALITY STRATEGY IT IS NECESSARY FOR ALL MEMBERS
TO REMAIN FULLY BEHIND THE IDEA AND STRATEGIC OBJECTIVES -EMBERS
NEED TO UNDERSTAND WHEN STRATEGIES MUST BE CHANGED )N ORDER TO
KEEP MEMBERS AND STAFF MOTIVATED IN THE MATURE PHASE OF AN /-)
PLANNING SHORT TERM GOALS AND NOT ONLY LONG TERM STRATEGIES IS
RECOMMENDED &URTHERMORE REGULAR INTERNAL COMMUNICATION WITH
MEMBERS IS IMPORTANT
)N THE ANALYSIS OF COUNTLESS /-)S IN %UROPE THE MOTIVATING

FACTORS OF STAFF IN LARGER /RGANIC -ARKETING )NITIATIVES WAS SEEN AS
ESPECIALLY IMPORTANT 4HIS MOTIVATION CAN BE IMPROVED WHEN
Q THERE IS A GOOD WORKING CLIMATE

Q THE HUMAN FACTOR IS SEEN AS IMPORTANT TO THE MANAGEMENT
Q THE STAFF CAN WORK WITHIN A SUFlCIENTLY LARGE FRAMEWORK OF
AGREED OBJECTIVES WITH THEIR OWN RESPONSIBILITIES
Q SPECIAL EFFORTS AND RESULTS ARE ACKNOWLEDGED BY THE MANAGE
MENT AND THE BOARD
)N GENERAL WINNING THE COMMITMENT OF ALL MEMBERS TO AN

/-)S PRINCIPLES AND OBJECTIVES AND BINDING THEM CLOSELY TO THE INI
TIATIVE IS IMPORTANT FOR THE IMAGE AND MESSAGES THAT /-) MEMBERS
TRANSMIT TO THE MARKET ENVIRONMENT
-ANY /-) FOUNDERSINITIATORS START WITH A @LEARNING BY DOING COMPETENCIES

APPROACH TO MARKETING DUE TO A LACK OF BACKGROUND KNOWLEDGE ON AND LEARNING
MARKETING MATTERS 5SUALLY THEY ACQUIRE THE SKILLS THEY LACK OVER TIME CURVES
AS SHOWN IN #HAPTER /BVIOUSLY THIS PROCESS OF SKILL ACQUISITION
DOES NOT JUST HAPPEN -ANY /-) FOUNDERS AND INITIATORS ARE FORCED
TO LEARN TO @MAKE MONEY WITH CLASSICAL BUSINESS MANAGEMENT SKILLS
AND BY MARKETING WITHOUT @LOSING THEIR SOULS ETHICAL OBJECTIVES
@!MATEURISM IN MARKETING AS SEEN IN THE PIONEERING PHASE OF OR
GANIC AGRICULTURE IN THE SEVENTIES AND EIGHTIES HAS NOW GENERALLY DIS
APPEARED 4HE CHALLENGE HOWEVER IS STILL WHETHER THESE MANAGEMENT
FUNCTIONS SHOULD BE PERFORMED BY THE /-) ITSELF THROUGH LEARNING OR
RECRUITMENT INTERNALLY OR WHETHER THEY SHOULD BE CONTRACTED OUT OR
ENTRUSTED TO AN ALLIED lRM EXTERNALLY

@3AIMAAN ,UOMU &INLAND

!CTIVE ROLE OF FARMERS IN PLANNING AND QUALITY DEVELOPMENT WITHIN
THEIR VEGETABLE lRM
-OST OF THE FARMERS WHO OWN THIS VEGETABLE INITIATIVE AND SELL
PRODUCTS TO THIS COMPANY HAVE WORKED TOGETHER FOR A LONG TIME AND
KNOW EACH OTHER WELL 4HEY HAVE FORMED A NUMBER OF FARMERS PRO
DUCT CIRCLES EG FOR GROWING ORGANIC ONIONS )N THIS WAY THEY CAN PLAN
AREAS SPECIES AND VOLUMES TOGETHER -OREOVER THIS IS AN EFFECTIVE
WAY OF SHARING COMMON KNOWLEDGE AND HELPING EACH OTHER IF PRO
BLEMS ARISE &ARMERS ARE COMMITTED TO THE DEVELOPMENT OF PRODUCTION
AND FEEL MOTIVATED WHEN THEY SUCCEED IN REACHING THEIR OBJECTIVES
&ARMERS SKILLS ARE HIGH STORAGE CONDITIONS VERY GOOD AND PACKAGING
SYSTEMS WELL SUITED TO CUSTOMER NEEDS 4HEY ARE ALSO CAREFULLY PUR
SUING POSSIBILITIES FOR ADDING VALUE TO THE BASIC VEGETABLES &ARMERS
HAVE ACTIVELY PARTICIPATED IN DEVELOPMENT PROJECTS OF LOCAL RESEARCH
ORGANISATIONS WHILE TRYING TO DEVELOP THEIR PRODUCTION METHODS AND
BUSINESS OPERATIONS )T CAN BE SAID THAT ELEMENTS OF COHERENCE AND
MOTIVATION ARE ACTIVE NETWORKING SHARING KNOWLEDGE BETWEEN FARM
ERS COMMITMENT TO COMMON OBJECTIVES AND TO A CERTAIN EXTENT ABI
LITY TO TAKE RISKS
/-)S MUST DEVELOP THEIR OWN SPECIlC LEARNING CURVES 4HE

@TRIAL AND ERROR APPROACH THAT IS OFTEN USED HAS ONE IMPORTANT AD
VANTAGE IT ALLOWS A FAST AND CONTINUOUS OPTIMISATION OF THE STRATEGY
4HIS FAST TRACK APPROACH CAN EVEN GIVE A COMPETITIVE ADVANTAGE IN THE
MARKETPLACE AS LONG AS ANY ERRORS MADE DO NOT ENDANGER THE OVERALL
STRATEGY OF THE ENTERPRISE %NTREPRENEURSHIP ALSO MEANS TAKING CER
TAIN RISKS 7ITHIN THIS CHALLENGING LEARNING PROCESS HOWEVER GAPS
IN KNOWLEDGE AND GAPS IN SKILLS SHOULD BE IDENTIlED !PPROPRIATE
MEASURES TO ACQUIRE THE MISSING KNOWLEDGE AND SKILLS ARE THEN EASIER
TO TAKE ON BOARD AND JUSTIFY
4HE ROLE OF INNOVATION

4HE EXPERIENCE OF MANY /-)S SHOWS THAT INNOVATION IS AN IMPORTANT

)NTERNAL FACTORS
ELEMENT FOR SUCCESS 4HERE ARE SEVERAL REASONS WHY CONTINUOUS INNO
VATION IS IMPORTANT FACILITATING
Q NEW PRODUCTS NEW SERVICES A NEW LABEL OR COMMUNICATION INNOVATIONS
MESSAGE ATTRACT NEW CUSTOMERS
Q OLD PRODUCTS LOSE ATTRACTIVENESS OVER TIME LIFE CYCLE OF PROD
UCTS
Q NEW PRODUCTS AND SERVICES HELP TO IMPROVE CUSTOMER VALUE AND
LOYALTY
Q NEW PRODUCTION OR PROCESSING METHODS MIGHT IMPROVE COST EF
lCIENCY
Q WITH INNOVATION AN ENTERPRISE CAN COMPETE BETTER ON THE MAR
KET PLACE AND REACT TO NEW TRENDS
Q NEW PRODUCTS SERVICES AND A BACKGROUND STORY THAT ARE WELL
PROMOTED HELP TO KEEP AN /-) IN THE MINDS OF CONSUMERS AND
BUSINESS PARTNERS
)N PARTICULAR PRODUCT POLICY AND COMMUNICATION POLICY INNO

VATION CAN RAISE THE MARKET COMPETITIVENESS OF PRODUCTS AND SERVICES
0ERIODICAL DEVELOPMENT AND PRESENTATION OF NEW PRODUCTS AND CON
VINCING COMMUNICATION IDEAS ARE THEREFORE ESSENTIAL FOR PRODUCTS TO
REMAIN ATTRACTIVE TO CUSTOMERS AT ALL LEVELS !BOVE ALL WHEN STARTING A
NEW LABEL AN EXCELLENT PRODUCT IDEA IS ESSENTIAL ALONGSIDE AN ATTRAC
TIVE PRODUCT STRUCTURE )T SHOULD BE NEWER IN MANY WAYS THAN EXISTING
LABELLING SCHEMES
4HE ADVANTAGE OF /-)S IS THAT THEY ARE NOT LARGE ENTERPRISES
WHERE NEW IDEAS ARE HINDERED BY HIERARCHIES OR COMPLICATED PLANS /-) MEMBERS
4HEY ARE NOT LIMITED BY RESEARCH AND DEVELOPMENT DEPARTMENTS 4HE AS MOTOR FOR
MANAGER TOGETHER WITH THE STAFF THE BOARD AND THE /-) MEMBERS IDEAS AND
MUST BE THE MOTOR FOR IDEAS AND INNOVATIONS !LL IDEAS PUT FORWARD INNOVATIONS
BY PEOPLE WITHIN AN /-) OR BY FRIENDS SHOULD BE WELCOMED AND SUP
PORTED IF THEY SEEM PROMISING (OWEVER EACH INNOVATION SHOULD BE
EVALUATED AS TO WHETHER THE MARKET REALLY NEEDS THIS INNOVATION AND
MOREOVER IF THE PRODUCT IS ABLE TO COVER THE COSTS OF PRODUCTION AND
PROCESSING
#REATIVITY AND INNOVATION CANNOT BE DICTATED FROM THE TOP

DOWN BUT THEY CAN BE FACILITATED FOR EXAMPLE BY
Q AN /-)S @INTERNAL ENTERPRISE CULTURE WHERE NEW IDEAS ARE WEL
COMED AND TAKEN SERIOUSLY

Q COLLECTING GOOD IDEAS THAT COME FROM CUSTOMERS AS WRITTEN COR

RESPONDENCE AND THEN CONSIDERING THEM AS NEW STRATEGIES
Q SENDING /-) MEMBERS TO OTHER REGIONS COUNTRIES COMPANIES
TRADE FAIRS OR ADULT EDUCATION FORUMS TO PROVIDE MOTIVATION
AND STIMULATION
Q BRINGING SMALL TASK FORCE QUALITY GROUPS TOGETHER THAT LOOK FOR
NEW PRODUCT AND SERVICE IDEAS
4HE SAME METHODS CAN BE USED AS DESCRIBED IN #HAPTER FOR

EXAMPLE YEARLY STRATEGIC WORKSHOPS ORGANISED IN A SPECIAL CREATIVE
ENVIRONMENT

)NNOVATION IN DEVELOPING NEW HERB BASED PRODUCTS
!S THE COMPANY HAS BEEN ONE OF THE PIONEERS IT HAS GAINED A GREAT
MANY SKILLS RELATING TO HERB PRODUCTION METHODS PROCESSING TECH
NIQUES AND MARKET OPPORTUNITIES )N CONTRAST TO THE COMPETITORS WHO
GENERALLY PRODUCE DRIED HERBS AND MAKE DIFFERENT HERB MIXTURES OR
HERB TEAS &RANTSILAN YRTTITILA HAVE TRIED TO DEVELOP MORE PROCESSED
AND NEW INNOVATIVE PRODUCTS FOR THE &INNISH MARKET %XAMPLES IN
CLUDE DIFFERENT EXTRACTS AND 2$ WORK WITH ORGANIC COSMETICS %X
PLORING INNOVATIVE AREAS HAS ALSO CREATED DIFlCULTIES AND EXTRA WORK
WHILE THERE HAVE BEEN NO CLEAR ORGANIC REGULATIONS RELATING TO THESE
AREAS )N THE CASE OF SOME PRODUCTS A GREAT DEAL OF NEGOTIATION HAS
BEEN NEEDED WITH THE AUTHORITIES TO OBTAIN PERMISSION TO SELL THEM
AS ORGANIC PRODUCTS )N THIS WAY THE COMPANY HAS WORKED FOR THE
BENElT OF THE WHOLE SECTOR
4HE ROLE OF BRANDS AND BRAND OWNERSHIP

)N #HAPTER AND ELSEWHERE THE IMPORTANCE OF BRANDS IN PRODUCT
POLICY ARE MENTIONED )N SUMMARY WE CAN STATE THAT @OWN BRANDS
MUST FULlL THE FOLLOWING REQUIREMENTS IF AN /-) WANTS TO OPERATE A
SUCCESSFUL BRAND 4HE BRAND MUST

)NTERNAL FACTORS
"IO 7EIDE "EEF FROM 3WITZERLAND IS ONE OF THE MOST SUCCESSFUL %UROPEAN ORGANIC MEAT
BRANDS 0HOTO -IGROS /STSCHWEIZ
Q SUGGEST A CERTAIN FUNCTIONAL AND EMOTIONAL BENElT TO THE CUS

TOMER
Q COMMUNICATE SPECIlC VALUES FOR SPECIlC CUSTOMER GROUPS
Q BE ABLE TO BE ASSOCIATED WITH A DElNED CERTAIN LIFESTYLE
Q COMMUNICATE THE REGIONAL ORIGIN AND @TYPICAL NATURE OF THE
BRAND
Q GIVE A CERTAIN GUARANTEE OF CONSISTENT QUALITY
Q HELP TO CONSTITUTE AND IDENTIFY THE lRM/-)
+EEP IN MIND THAT THERE ARE ALSO SEVERAL FACTORS WHICH LIMIT THE USE OF
BRANDS BY /-)S
Q BRANDS ARE SELDOM WELL KNOWN OUTSIDE OF THEIR REGION UNLESS
THEY ARE POWERED BY TREMENDOUSLY HIGH MARKETING BUDGETS IN
ORDER TO ACHIEVE A HIGH RECALL RATE
Q RAISING THE PROlLE OF A BRAND CAN BE VERY COSTLY
Q THE COMMUNICATION OF A BRAND NEEDS A GOOD PSYCHOLOGICAL
KNOWLEDGE OF CONSUMER REACTIONS
Q A BRAND NEEDS PERSONS THAT FEEL RESPONSIBLE FOR MANAGEMENT OF
THE BRAND

@!LCE .ERO )TALY

%RROR IN OUTSOURCING BRAND MANAGEMENT AND OWNERSHIP FOR )TALIAN
MARKET
!LCE .ERO AN )TALIAN ORGANIC PASTA INITIATIVE ENDED UP CONCENTRATING
ON SUPERMARKETS AND THE EXPORT MARKET DUE TO CIRCUMSTANCES NOT
BECAUSE OF A LONG TERM STRATEGY
!T THE BEGINNING !LCE .ERO WAS ESTABLISHED IN THE EXPORT
MARKET WAS THE ONLY MARKET AVAILABLE FOR THE lRST )TALIAN ORGANIC PASTA
MAKER THE LOCAL MARKET WAS NON EXISTENT OR TOO SMALL 4HE ENCOUN
TER OF 'INO 'IROLOMONI FOUNDER OF !LCE .ERO WITH *OSEF 7ILHELM
FOUNDER OF 2APUNZEL 'ERMANY IN WAS THE BEGINNING OF A PART
NERSHIP LASTING OVER YEARS THAT ASSURED !LCE .ERO A STABLE OUTLET IN
THE 'ERMAN MARKET
.OWADAYS THE EXPORT MARKET IS STILL VERY IMPORTANT !LCE .ERO SELLS
MORE THAN OF ITS TURNOVER ABROAD WITH 'ERMANY ACCOUNTING FOR
OF ITS EXPORTS OTHER EXPORT MARKETS INCLUDE *APAN 53! &RANCE
3WITZERLAND )T IS ALSO THE ONLY MARKET WHERE !LCE .ERO HAS COMPLETE
CONTROL OF ITS BRANDS !LCE .ERO -ONTEBELLO SINCE BRAND MANAGE
MENT WITHIN )TALY IS CARRIED OUT BY -EDITERRABIO A PARTNERSHIP WITH
OTHER CO OPERATIVES THAT OWNS THE BRAND !LCE .ERO ON THE )TALIAN MAR
KET -EDITERRABIO WAS ESTABLISHED IN TO MANAGE SOME ORGANIC
BRANDS ON THE )TALIAN MARKET AND HAS MAINLY TARGETED THE SUPERMARKET
AND LARGE RETAILING GROUPS !S A RESULT IN THE LAST YEARS !LCE .EROS
BRAND HAS ALMOST DISAPPEARED FROM THE SPECIALISED ORGANIC SHOPS IN
)TALY WHICH STILL ACCOUNT FOR OF THE DOMESTIC ORGANIC RETAIL MAR
KET WHILE THE MARKETING MANAGER OF !LCE .ERO CAN ONLY OPERATE IN THE
EXPORT MARKETS WHICH HAVE GAINED FURTHER MOMENTUM
4HE DESCION TO ESTABLISH -EDITERRABIO WAS IN PART A SOLUTION TO !LCE
.EROS SEVERE lNANCIAL PROBLEMS IN THE LATE @S 5NFORTUNATELY DUE
TO A CHANGE IN STRATEGIC ALLIANCES IN -EDITERRABIO !LCE .ERO COMPLETE
LY LOST CONTROL OF ITS BRAND IN THE )TALIAN MARKET !LCE .ERO IS CURRENTLY
TRYING TO BUY BACK ITS BRAND FROM -EDITERRABIO AT THE COST OF SEVERAL
MILLION EUROS

)NTERNAL FACTORS
"RANDS ARE MORE IMPORTANT WHERE /-)S SELL THEIR PRODUCTS TO

CUSTOMERS AND NETWORK PARTNERS INDIRECTLY VIA A LONG CHAIN )F /-)S CLEVER BRAND
HAVE A MORE DIRECT LINK IT IS IMPORTANT TO EVALUATE WHETHER A BRAND POLICY
WILL REALLY BRING ENOUGH BENElTS TO THE /-) 4HERE MAY BE OTHER
WAYS TO COMMUNICATE THE ORIGIN OR SPECIAL QUALITY OF THE PRODUCTS
4HERE ARE SOME ESSENTIAL RULES WHEN USING BRANDS

Q ! BRAND MUST STIMULATE PICTURES IMAGES AND EMOTIONS IN CUS
TOMERS
Q ! BRAND MUST BECOME AN UMBRELLA OF CONSTRAINTS FOR ALL FURTHER
STRATEGIC QUESTIONS AND MARKETING ACTIVITIES
Q ! BRAND NEEDS NOT ONLY A VISUAL LABEL BUT ALSO A NAME WHICH
MAKES AN EMOTIONAL LINK EG TO MOUNTAINS OR PASTURES LIKE THE
3WISS /-) BRAND @"IO 7EIDE "EEF
Q /-)S SHOULD NOT GIVE UP THEIR BRAND OWNERSHIP EVEN IF MARKET
ACTORS OFFER A RELATIVELY HIGH SOUNDING PRICE 4HE /-) WOULD
DElNITELY LOSE MARKET POWER AND WOULD BE MORE DEPENDENT ON
THE NEW BRAND OWNER
@"IO"OURGOGNE 6IANDE &RANCE

"RAND FOR REGIONAL PRODUCTS BUT WITH A WEAK PROlLE
"IO"OURGOGNE IS A REGIONAL BRAND THAT CAN BE USED FOR MANY DIFFERENT
PRODUCTS )T IS OWNED BY A REGIONAL ASSOCIATION AND CAN BE CONSIDERED
AS THE REmECTION OF A GENERAL INTER SECTORAL DYNAMISM 4HE "IO"OUR
GOGNE BRAND WAS REGISTERED IN
4HIS REGIONAL BRAND IS PART OF AN ESTABLISHED AND STRONG ENDEAVOUR
BUT CURRENTLY HAS A LOW PROlLE VIS ¸ VIS CONSUMERS FOR EXAMPLE
-OREOVER IT IS A COLLECTIVE SIGN OF QUALITY BUT UNFORTUNATELY WITH NO
PRECISE BRAND POLICY "ESIDES THE INDICATION OF THE ORIGIN NO FURTHER
REQUIREMENTS ARE STIPULATED THAT MIGHT CREATE ADDED VALUE FOR THE
CONSUMERS 3OURCE ).2! ,E -ANS &RANCE
4HE ROLE OF NETWORKS NETWORKING AS

%FFECTIVE CO OPERATION IS AN ESSENTIAL FACTOR FOR THE SUCCESS OF MARKE AN INTERACTIVE
TING INITIATIVES ! NETWORK IS A GROUP OF ACTORS AND MULTI FORM PART PROCESS

NERSHIPS THAT CAN BE ESTABLISHED EITHER ALONG A MARKET CHAIN OR IN THE

FORM OF A REGIONAL NETWORK WITH MORE EXTERNAL ACTORS
.ETWORKS ARE NOTHING NEW BUT THEIR MEANING AND IMPORTANCE
HAVE CHANGED 4ODAY NETWORKING IS SEEN IN MORE DYNAMIC TERMS AND
AS A PROCESS &ROM THIS PERSPECTIVE A NETWORK IS NOT ONLY SEEN AS AN
INSTRUMENT FOR MAKING COMMERCIAL DECISIONS BUT AS AN OPPORTUNITY
TO TRANSFORM POWER RELATIONSHIPS BETWEEN DIFFERENT ACTORS
"ETTER CULTIVATION OF NETWORKS IS OFTEN NEGLECTED BY THE MANA
GEMENT OF /-)S #OMMUNICATION AS AN INTERACTIVE PROCESS PLAYS
A KEY ROLE )T THEREFORE FOLLOWS THAT /-) MEMBERS WHO ARE VERBAL
CONVINCING AND WITH A NEUTRAL STANDING OR EVEN BETTER WITH POSITIVE
AWARENESS SHOULD GENERALLY ENGAGE IN NETWORK ACTIVITIES IN A REGION
OR MARKET 4HERE ARE EXAMPLES OF /-) MANAGERS WHO HAVE WONDER
FUL IDEAS OR ARE VERY GOOD DECISION MAKERS BUT WHEN THEY COMMUNI
CATE THEIR OWN IDEAS OR OPINIONS THEY ARE AGGRESSIVE 4HEY ARE NOT THE
RIGHT PEOPLE FOR @NETWORKING
-ARKET RELATED NETWORKS ALLOW MARKETING INITIATIVES TO OBTAIN
OPPORTUNITIES NEW AND DIVERSIlED INFORMATION ABOUT MARKET DEVELOPMENT 4HEY
FOR MARKET HELP TO GAIN NEW INTERNAL AND EXTERNAL COMPETITIVENESS THROUGH CO
RELATED NETWORKS OPERATION PRODUCTIVITY mEXIBILITY AND MORE ADJUSTABLE MARKETING
CAPABILITIES 4HEY FACILITATE THE DEVELOPMENT OF PARTNERSHIPS WITH
CUSTOMERS THAT ARE BASED ON TRUST AND FAIR TRADE PRACTICES
.ETWORKING ALLOWS A MULTIPLICATION OF CO OPERATION OPPORTU

NITIES ON DIFFERENT LEVELS
AT LOCAL LEVEL IN THE DAY TO DAY CO OPERATION OF FARMER
GROUPS AND SMALL ENTREPRENEURS
IN THE EMERGENCE OF LOCALLY ORGANISED COMMERCIAL INITIATIVES
TO ESTABLISH A STRUCTURE FOR SELLING DIRECT TO CONSUMERS OR TO
CREATE A LOCAL BRAND
AT MICRO LEVEL AS INITIATIVES TO CREATE NEW AND MORE INDE
PENDENT MARKET STRUCTURES OR TO NEGOTIATE BETTER CONDITIONS
WITH THE DISTRIBUTION SYSTEM
PRODUCTIVE DIVERSIlCATION WHICH NEEDS HEAVY lNANCIAL AND
TECHNICAL INVESTMENTS
2EGION RELATED NETWORKS ARE IMPORTANT AS THEY HELP TO BETTER INTE

GRATE AN /-) INTO A REGION 4HEY ENABLE MORE EFlCIENT IDENTIlCA
TION AND USE OF LOCAL RESOURCES AND POTENTIALS AND EARLY AWARENESS

)NTERNAL FACTORS
$ESPITE OF THE EXISTENCE OF THE BRAND "IO"OURGOGNE THERE IS NO PRECISE BRAND POLICY
0HOTO / 3CHMID
OF POSSIBLE lELDS OF CONmICT WITH OTHER REGIONAL ACTORS 4HEY HELP BY REGION RELATED
PROVIDING BETTER ACCESS TO PUBLIC FUNDS EG SUPPORT FROM REGIONAL NETWORKS
DEVELOPMENT FUNDS
&URTHERMORE IT IS MAINLY THROUGH REGIONAL NETWORKS THAT AN

/-) CAN CONTRIBUTE MOST TO RURAL DEVELOPMENT
&URTHER BENElTS OF SUCH REGIONAL NETWORKS CAN BE

TO CONTRIBUTE TO THE IDENTITY OF A REGION
TO CREATE A POSITIVE ATTITUDE TOWARDS THE FUTURE DEVELOPMENT
OF LESS FAVOURED AREAS
TO STIMULATE NEW INNOVATIVE IDEAS
TO CONTRIBUTE TO THE MULTIPLICATION OF INCOME POSSIBILITIES
4O RECOGNISE AND USE THE HELPING HAND PROVIDED BY ACTORS THAT SUPPORT RELATED
ARE ABLE TO GIVE SUPPORT BY lNANCING OR CONSULTANCY ACTIVITIES CAN BE NETWORKS
ONE OF THE MOST RELEVANT FACTORS FOR ECONOMIC SUCCESS 3UPPORT RE
LATED NETWORKS MAY COMPRISE PUBLIC AND PRIVATE CONSULTANTS ASSOCIA
TIONS BODIES FROM THE lNANCIAL SECTOR AND UNIVERSITY RESEARCHERS

@0OHJOLAN ,UOMU &INLAND

"UILDING UP AND ORGANISING THE ORGANIC GRAIN MARKET THANKS TO
CONTINUOUS NETWORKING
!S THIS GRAIN COMPANY HAS BASED ITS BUSINESS ON THE PRINCIPLES OF
RELATIONSHIP MARKETING THEY ARE VERY COMMITTED TO AN ACTIVE ROLE IN
NETWORKS 4HE COMPANY PARTICIPATES ACTIVELY IN THE DEVELOPMENT OF
THE WHOLE ORGANIC GRAIN SECTOR IN &INLAND AND TRIES TO INCREASE KNOW
LEDGE SHARING BETWEEN ACTORS #LEAR INFORMATION ABOUT THE NEEDS OF
THEIR CUSTOMERS GIVES THE COMPANY POSSIBILITIES FOR PLANNING PRODUC
TION WITH THE FARMERS 4HE COMPANY TRIES TO WORK IN SUCH A WAY THAT
FARMERS CAN CONCENTRATE ON FARMING AND THE COMPANY TAKES CARE OF
LOGISTICS SOLUTIONS QUALITY CONTROL AND HELPING FARMERS OBTAIN THE NE
CESSARY CERTIlCATION DOCUMENTS
4HE IMPORTANCE OF NETWORKING IS CLEARLY STATED IN THE BUSINESS POLICY
BECAUSE IN ORDER TO MANAGE ITS BUSINESS SUCCESSFULLY THE COMPANY
RELIES ON MANY PARTNERS AND A GREAT DEAL OF CO OPERATION AMONG AC
TORS REGIONALLY NATIONALLY AND INTERNATIONALLY "EFORE 0OHJOLAN ,UOMU
STARTED BUILDING UP ITS NETWORK OF RELATIONS ORGANIC GRAIN MARKETS
WERE NOT AT ALL ORGANISED IN &INLAND
.EW ACTORS WITH NEW IDEAS MAY JOIN THE NETWORK AT A LATER STAGE
AND THIS MAY CREATE CONmICTS 4HE ONGOING EXCHANGE OF INFORMATION
KNOWLEDGE AND VALUES IS A CONDITION OF THE PARTICIPATION PROCESS
4HERE ARE DIFFERENT WAYS OF IMPROVING @NETWORKING BY COMMUNICA
TION FOR EXAMPLE
WITH REGULAR NEWSLETTERS

WITH ROUND TABLE DISCUSSIONS OR SOCIAL EVENTS EG ONCE A
YEAR TO WHICH ALL RELEVANT STAKEHOLDERS ARE INVITED
4HE ROLE OF MARKET RESEARCH

SYSTEMATIC -ARKET RESEARCH IS THE SYSTEMATIC COLLECTION OF INFORMATION ON EXIST
COLLECTION OF ING OR POTENTIAL MARKETS FOR ANALYSIS AND SUBSEQUENT ACTION %VERY
INFORMATION MARKETING INITIATIVE NEEDS INFORMATION TO DElNE OR REDElNE THEIR
STRATEGIC OBJECTIVES AS THE BASIS FOR STRATEGY PLANNING AND THE DECI

)NTERNAL FACTORS
SION MAKING PROCESS 4O OBTAIN RELEVANT INFORMATION YOU NEED TO

COLLECT AND ANALYSE PRECISE INFORMATION ON THE DYNAMICS OF THE CHO
SEN MARKETPLACE ON CONSUMER BEHAVIOUR AND NEEDS AND ON FUTURE
TRENDS AND THE COMPETITION 4HE AIM IS TO BE ABLE TO
Q REACT MORE EFFECTIVELY TO THE CHANGING MARKET ENVIRONMENT

Q ASCERTAIN THE NEEDS OF CHOSEN CUSTOMERS
Q lND OUT WHAT YOUR COMPETITORS ARE DOING
Q IDENTIFY NEW MARKET POTENTIALS
Q MINIMISE RISKS
Q CUSTOMISE PRODUCTS
Q MAXIMISE RETURNS
-ARKET RESEARCH IS A WIDE AND EXPENSIVE lELD THAT NEEDS AN

OUTSTANDING UNDERSTANDING OF THE FUNCTION OF THE MARKET AND FACTORS
INmUENCING IT /-) ACTORS DO NOT NEED TO BE SUCH SPECIALISTS THEY
@"IOBAUERN 3ULZBERG !USTRIA

7ELL DEVELOPED NETWORK WITH THE UMBRELLA ORGANISATION WHICH
STRONGLY SUPPORTS THE ECONOMIC ACTIVITY OF THE /-)
")/6ORARLBERG A MARKETING ASSOCIATION FOR REGIONAL ORGANIC PRODUCTS
IN ADDITION TO OTHER ACTIVITIES AIMS TO INCREASE THE SUPPLY OF PUBLIC
KITCHENS AND CANTEENS WITH ORGANIC PRODUCE (ENCE IN CONNECTION
WITH AN ).4%22%' PROJECT ")/6ORARLBERG HAS STARTED TO RENT CANTEENS
ITSELF 4HE MAIN SUPPLIER IS THE DELIVERY SERVICE OF THE ORGANIC FARMERS
OF 3ULZBERG AN /-) THAT FOCUSES MAINLY ON MARKETING THE PRODUCTS
OF THEIR MEMBERS 4HIS NETWORK OF WELL ESTABLISHED PERSONAL AND
ORGANISATIONAL RELATIONSHIPS OFFERS ADVANTAGES TO THE ")/6ORARLBERG
BY PROVIDING FRESH REGIONAL ORGANIC PRODUCE AND FOR THE FARMERS
BY INCREASING THEIR ADDED VALUE BY USING AN ALTERNATIVE FOOD SUPPLY
CHAIN !DDITIONALLY FOR BOTH SIDES IT SEEMS TO BE AN INTERESTING WAY OF
ENHANCING THEIR REPUTATION AND INCREASING PUBLIC AWARENESS AS AN AD
VANTAGE FOR FURTHER MARKETING OPPORTUNITIES 4HE DIFlCULTY IN THIS CASE
IS THE PRODUCTION MANAGEMENT OF THE FARMERS TO MEET THE DEMAND
OF PUBLIC KITCHENS AS WELL AS THE CHALLENGE OF DEVELOPING AN EFFECTIVE
AND RELIABLE LOGISTICS SYSTEM

CAN OUTSOURCE MARKET RESEARCH ACTIVITIES HOWEVER THEY SHOULD AT

LEAST HAVE SOME IDEA OF THE APPROACHESMETHODS OF MARKET RESEARCH
THE COSTBENElT RATIO OF DIFFERENT MARKET RESEARCH METHODOLOGIES AND
ABOUT THE MEANING AND INTERPRETATION OF MARKET RESEARCH RESULTS
&OR lELD RESEARCH SEVERAL METHODS ARE AVAILABLE THAT CANNOT BE
DESCRIBED IN DETAIL HERE %ACH OF THESE METHODS HAS ADVANTAGES AND
DISADVANTAGES 4HE METHODS CAN BE COMBINED
/-)S DO NOT USUALLY HAVE LARGE BUDGETS TO CONDUCT MARKET RE

LOW BUDGET SEARCH 4HERE ARE HOWEVER ALWAYS WAYS OF CO OPERATING WITH UNIVER
MARKET RESEARCH SITIES OR OTHER SUPPORTIVE PEOPLE AS ALREADY MENTIONED IN #HAPTER

)T IS IMPORTANT TO lND OUT WHAT INFORMATION YOU REALLY NEED FOR

DECISION MAKING SO AS NOT TO WASTE TIME EFFORT AND MONEY WITH COM
PREHENSIVE SURVEYS WHERE OF THE ANSWERS CANNOT BE ANALYSED OR
INTERPRETED FOR THE PARTICULAR CASE OF AN /-) 4HERE ARE MANY ISSUES
WHICH WOULD BE INTERESTING BUT CANNOT BE DEALT WITH )T IS IMPORTANT
TO DETERMINE THE MOST URGENT KEY QUESTIONS )T MIGHT BE USEFUL TO
DEVELOP SOME HYPOTHESES OR MAIN QUESTIONS WHICH CAN BE RESEARCHED
AND IF POSSIBLE ALSO TESTED IN PRACTICE 4HIS SUGGESTED COMBINATION
INCLUDING PRACTICAL TESTING IS IMPORTANT BECAUSE THERE WILL ALWAYS BE
A GAP BETWEEN WHAT CUSTOMERSCONSUMERS SAY THEY WILL DO OR WANT TO
DO AND HOW THEY REALLY REACT OR WHAT THEY REALLY NEED
4ABLE GIVES A ROUGH OVERVIEW OF SOME lELD RESEARCH METHODS

AND HOW THEY CAN BE APPLIED TO /-)S
4ABLE /VERVIEW OF lELD RESEARCH METHODS AND THEIR APPLICABILITY TO /-)S

-ETHODS FOR LARGE ORGANISATIONSlRMS -ETHODS BETTER ADAPTED FOR /-)S
&ACE TO FACESTREET INTERVIEWS DIRECT
/WN MARKET OBSERVATION
WITH REPRESENTATIVE APPROACHES
0RODUCT TESTING MARKET TESTING %XPLORATORY INTERVIEWS DURING TASTING
OR LABORATORY TESTING CAMPAIGNS
2EPRESENTATIVE SURVEYS 7RITTEN QUESTIONNAIRES
#ONSUMER PANELS 4ELEPHONE INTERVIEWS

)NTERNAL FACTORS
@"IOLAND 'MB( .ORD 'ERMANY

"IOLAND 'MB( .ORD WAS FOUNDED IN IN THE CONTEXT OF AN EXEM
PLARY PROJECT OF THE 'ERMAN &EDERAL -INISTRY OF !GRICULTURE "IOLAND
'MB( .ORD WAS AN INITIATIVE OF DIFFERENT PRODUCT RELATED PRODUCER
INITIATIVES 3HAREHOLDERS OF THE INITIATIVE WERE FARMERS WHO PRODUCE
THEIR PRODUCTS ACCORDING TO THE GUIDELINES OF THE ")/,!.$ ASSOCIA
TION 4HE INITIATIVE CO ORDINATED THE PRODUCTION AND MARKETING OF OR
GANIC PRODUCTS AND SUPPLIED RETAILERS AND PROCESSORS
!CADEMIC RESEARCHERS FROM THE 5NIVERSITY OF (OHENHEIM PROVIDED
SUPPORT DURING THE FOUNDING AND THE lRST THREE YEARS OF "IOLAND
'MB( .ORD )N ADDITION TO THE SCIENTIlC SUPPORT FROM TEACHING STAFF
A 0H$ DISSERTATION AND A THESIS WERE WRITTEN ON THE TOPIC )N THE
CONTEXT OF THE DISSERTATION A MARKETING CONCEPT WAS COMPLETED FOR
THE INITIATIVE RELATING TO ORGANICALLY PRODUCED MEAT 4HE TOPIC OF THE
THESIS WAS THE EVALUATION OF THE EFlCIENCY OF /-)S WITH DIFFERENT PRO
DUCTS )N ADDITION ACADEMIC RESEARCHERS CONDUCTED A YEARLY WEEKEND
SEMINAR WITH MANAGERS LEADING FARMERS AND THE STAFF OF THE /-) TO
MONITOR THE ECONOMIC SUCCESS AND DEVELOP AND PROMOTE MARKETING
STRATEGIES !FTER lVE YEARS THIS /-) BECAME THE LEADING /-) IN 'ER
MANY WITH THE HIGHEST TURNOVER OF ALL 'ERMAN /-)S
!PART FROM RELATIVELY CHEAP METHODS OF MARKET RESEARCH

CONSULTATIONS WITH UNIVERSITY RESEARCHERS AND LIBRARIES MAY BE AN
APPROPRIATE WAY OF OBTAINING VALUABLE MARKET INFORMATION ON A LOW ROLE OF EXTERNAL
BUDGET %VEN MORE SPECIlC INFORMATION CAN BE DERIVED IF MARKET RE SERVICES SUCH AS
SEARCH IS LINKED TO A UNIVERSITY -ASTER OR "ACHELOR THESIS "UILDING UP UNIVERSITIES
CLOSE RELATIONSHIPS WITH THE ACADEMIC SECTOR SHOULD THEREFORE BE PART
OF /-) NETWORKING )T IS IMPORTANT THAT DURING SUCH RESEARCH A RES
PONSIBLE MEMBER OF STAFF IF POSSIBLE THE MANAGER KEEPS TRACK OF THE
WORK )F THERE ARE INTERVIEWS WITH MARKET ACTORS A PERSON FROM THE
/-) SHOULD ALSO BE PRESENT )F THIS DOES NOT HAPPEN THERE IS ALWAYS A
RISK THAT VALUABLE INFORMATION COULD GET LOST OR MAY NOT BE TAKEN UP
PROPERLY IN THE REPORT BECAUSE THE STUDENT WAS UNABLE ADEQUATELY TO
ESTABLISH THE CONTEXT OF SUCH INFORMATION

)F AN /-) CARRIES OUT MARKET RESEARCH ON ITS OWN OR CO OPE

RATES WITH MARKETING SPECIALISTS IT IS IMPORTANT TO CLARIFY THE
/BJECTIVE 7HAT DO YOU NEED TO KNOW 7HAT INFORMATION IS RELEVANT

3AMPLES &ROM WHOM DO YOU NEED THE INFORMATION
CLARIFYING -ETHOD 7HAT METHOD WILL BE USED
INFORMATION 7HAT TYPES OF QUESTIONS ARE RELEVANT AND GIVE VALUABLE
3TRUCTURE
NEEDS INFORMATION
)N WHICH FORMAT SHOULD THE RESULTS BE SUMMARISED AND
!NALYSIS
PRESENTED
/UTCOME 7HAT WILL YOU DO WITH THE INFORMATION
#OSTS (OW MUCH HAS TO BE PAID AND IS IT WORTH IT
4IMING 7HEN ARE THE RESULTS NEEDED
/-) MANAGERS SHOULD PARTICIPATE IN THE PROCESS OF MARKET RE

SEARCH AS MUCH AS POSSIBLE EVEN IF A FOREIGN AGENCY IS SUBCONTRACTED
TO CONDUCT MARKET RESEARCH 4HEY SHOULD ALSO TALK WITH CUSTOMERS
AND CONSUMERS TO GET A FEELING ABOUT THE /-) ITS PRODUCTS COMPETI
TIVE PRODUCTS AND GENERAL MARKET AND CONSUMER TRENDS 5NDERSTAN
DING THE MARKET IS ONE OF THE MAIN PRECONDITIONS FOR ANTICIPATING
CHANGES IN MARKET DEVELOPMENT AND FOR PREDICTING THE CONSEQUENCES
FOR THE /-)S PRODUCTS
RELEVANT MARKET -ARKET RESEARCH SHOULD NORMALLY ASCERTAIN WHAT THE CUSTOMERS
RESEARCH NEED WHAT IMAGE THEY HAVE OF THE /-) AND IDEAS ABOUT THE MAIN
QUESTIONS FOR COMPETITORS 1UESTIONS MUST BE ADDRESSED IN SUCH A WAY THAT THE ANS
/-)S WERS CAN PROVIDE DIRECT INPUT INTO /-) STRATEGIES LIKE THE FOLLOWING
EXAMPLES
Q 7HAT CAN BE IMPROVED IN THE PRODUCT QUALITY ANDOR SERVICE OF
THE /-)
Q )S THE PACKAGING AND DELIVERY CONVENIENT 7HAT SHOULD BE IM
PROVED
Q 7HAT IMAGE DO OUR PRODUCTSBRANDS HAVE FOR OUR TARGET
GROUPS 7HAT IMAGE DO THE COMPETITORS PRODUCTSBRANDS HAVE
FOR OUR TARGET GROUPS
Q )S THE PRODUCT RANGE SUFlCIENTLY BROAD AND OF HIGH ENOUGH
QUALITY IN THE EYES OF THE CONSUMER
Q 7HAT OTHER PRODUCTS AND SERVICES WOULD THE CUSTOMER WISH
FROM THE /-)

)NTERNAL FACTORS
@4ALKION ,EIPOMO AND @*UVAN ,UOMU &INLAND

!CCESS TO MARKET RESEARCH WITH CO OPERATION
$IFFERENT MARKET RESEARCH ACTIVITIES ARE IMPORTANT TOOLS TO DIRECT BUSI
NESS DECISIONS IN BIG COMPANIES )N ORDER TO HAVE ACCESS TO MARKET
RESEARCH THE TWO &INNISH /-)S 4ALKION ,EIPOMO A BAKERY INITIATIVE
AND *UVAN ,UOMU A MILK DAIRY HAVE BOTH MADE A STRATEGIC ALLIANCE
WITH LARGE INTERNATIONAL COMPANIES &AZER AND 6ALIO RESPECTIVELY
"IG COMPANIES FOLLOW THE DEVELOPMENT OF ORGANIC MARKETS CAREFULLY
BECAUSE THESE MARKETS ARE ONE OF THE MOST RAPIDLY GROWING MARKETS
TOGETHER WITH HEALTH RELATED MARKETS 4HE RESULTS OF DIFFERENT MARKET
RESEARCH CAN BE TAKEN INTO ACCOUNT DIRECTLY IN PRODUCT DEVELOPMENT
PRICING PACKAGING POLICIES ETC &OR SMALL COMPANIES MARKET RESEARCH
IS TOO EXPENSIVE TO DERIVE BENElT FROM IT
4HE ROLE OF STRATEGIC TURNING POINTS IN /-) DEVELOPMENT

-OST /-)S ARRIVE AT SOME POINT AT A LIMIT IN THEIR STRATEGIES 4HEY
lND THEMSELVES AT A CROSSROADS WHICH HAPPENS TO USE AN AIR TRAVEL
METAPHOR AFTER TAKE OFF THE CLIMB AND THE CRUISING POINT SEE l
GURE NEXT PAGE 4HIS lGURE IS VERY SIMILAR TO THE NORMAL PRODUCT
LIFE CYCLE THEORY PERSPECTIVE )N ACCORDANCE WITH THAT TERMINOLOGY
REVITALISATION POINTS ARRIVE AT WHICH MANAGERS NEED TO MAKE CRITI
CAL DECISIONS AND FOCUS EFFORTS ON DEVELOPING CONCEPTS SO THAT A NEW
GROWTH PERIOD CAN BE ACHIEVED
4HIS MOMENT OF TRUTH LEADS THEM TO THINK AGAIN ABOUT THEIR
OBJECTIVES AND TO REFORMULATE THEIR STRATEGIES 4HIS SECTION AIMS TO
DESCRIBE THIS STAGE OF AN /-)S DEVELOPMENT AND TO SHOW THAT ONE OF
THE CONDITIONS FOR COMING THROUGH THIS STAGE SUCCESSFULLY IS TO RESOLVE
THE QUESTIONS OF INTERNAL AND EXTERNAL COHESION 4HE ONLY WAY TO PASS
THIS POINT IS WITH THE SUPPORT OF THE MAJORITY BOTH WITHIN AND OUT
SIDE THE BUSINESS
3TRATEGIES GO THROUGH SEVERAL TYPES OF PHASES START PHASE CON THE STRATEGIC
SOLIDATION PHASE AND ADJUSTMENT PHASES OR STRATEGIC TURNING POINTS TURNING POINT
4HE FOLLOWING QUESTIONS MIGHT BE ASKED AFTER A WHILE

&IGURE 4HE STRATEGIC TURNING POINT FOR AN /-) USING THE AIR TRAVEL METAPHOR
3OURCE 3YLVANDER ET AL
Q 3HOULD WE ASPIRE TO INCREASED GROWTH

Q 3HOULD WE MOVE INTO FRANCHISING
Q )S A NICHE STRATEGY VIABLE IN THE LONG TERM OR SHOULD WE EXPECT
THE MARKET TO DEVELOP GREATLY
Q 3HOULD WE INVEST IN NEW PRODUCTS NEW EQUIPMENT AND NEW
MARKETS
Q 3HOULD WE PUT PRODUCER PRICES lRST
Q 3HOULD WE JOIN FORCES WITH CONVENTIONAL lRMS
Q 3HOULD WE OUTSOURCE SOME TASKS OR DO THINGS OURSELVES
3UCH STRATEGIC QUESTIONS ARE RELEVANT TO /-)S AND ARE ALSO

GENERAL QUESTIONS IN ORGANIC AGRICULTURE TODAY (AVING ACHIEVED RE
COGNITION FROM PUBLIC POLICY AND CONSUMERS AND SOCIETY AT LARGE
NEW ENTRANTS ARE COMING IN AT ALL LEVELS 4HE FAR REACHING CHANGES
INVOLVED IN THE RAPID DEVELOPMENT OF THE ORGANIC MARKET BRING MANY
RISKS FOR THOSE WHO HAVE BEEN IN THE ORGANIC BUSINESS FOR A LONG TIME
AN ECONOMIC RISK IF THEY LOSE THEIR MARKET POWER SPECIlC TO THE NICHE
AND IF PRICES COLLAPSE A POLITICAL RISK IF AS IT DEVELOPS THE ORGANIC
MARKET BECOMES NO MORE THAN ONE OF MANY LINES FOR DIVERSIlED MAR
KETING AND ITS UNIVERSAL MESSAGE IS WEAKENED
!T AN /-)S ENTERPRISE LEVEL AS SHOWN IN #HAPTER THERE IS
NO OTHER CHOICE THAN TO PERIODICALLY ANALYSE THE OPPORTUNITIES AND
THREATS OF ALL ACTIVITIES 4HIS SHOULD FACILITATE RE ORIENTATION OF OB
JECTIVES BEFORE SERIOUS PROBLEMS ARISE )T MIGHT BE USEFUL TO INCLUDE
EXTERNAL EVALUATORS IN THIS PROCESS BECAUSE THEY HAVE A MORE NEUTRAL
VIEW

)NTERNAL FACTORS
4HE ROLE OF ECONOMIES OF SCALE

4HE TERM @ECONOMIES OF SCALE IS OFTEN USED TO REFER TO THE FACT THAT
LARGER ENTERPRISES HAVE BETTER COST EFlCIENCY AND WILL BE MORE PROl
TABLE EG A LARGE CENTRAL CEREAL MILL WILL HAVE MUCH LOWER PRODUCTION
COSTS THAN A SMALL REGIONAL MILL WITH OLD EQUIPMENT
&ORTUNATELY THE REALITY IS NOT THAT SIMPLE AND SOMETIMES QUITE

DIFFERENT 4HIS DEPENDS VERY MUCH ON THE STRATEGY AN /-) HAS CHO
SEN 4HERE ARE TWO MAIN GROUPS OF /-)S THOSE THAT GO FOR A QUALITY
"IOBAUERN 3ULZBERG@ !USTRIA

3TRATEGY FOR SMALL SCALE PROCESSORS OPTIMISATION OF EXISTING
CAPACITIES
&OR MOST SMALL DAIRIES THE PRODUCTION COSTS OF MILK DUE TO HIGH lXED
EQUIPMENT AND PERSONAL COSTS AS WELL AS COLLECTION COSTS IS A CRUCIAL
ASPECT OF COMPETITIVENESS "IOBAUERN 3ULZBERG A SMALL ORGANIC DAIRY
CO OPERATIVE COLLECTS ABOUT MILLION KG OF MILK A YEAR AND PROC
ESSES IT MAINLY INTO RIPENED CHEESE SPECIALITIES
!S REGARDS ECONOMIES OF SCALE ONE STRATEGY OF THE /-) COULD BE
GROWTH WHICH WOULD UNFORTUNATELY RAISE THE QUESTION OF EXISTING
CAPACITIES n HUMAN lNANCIAL AS WELL AS FOR THE VOLUME OF MARKETED
PRODUCE #UTTING ACROSS A CERTAIN PRODUCTION LEVEL IN THIS CASE WOULD
ENORMOUSLY INCREASE THE NEED FOR INVESTMENTS CHEESE PRODUC
TION AND STORAGE MILK COLLECTION LORRY AND EMPLOYEES CAUSING A
RAPID INCREASE IN lXED COSTS !CTING IN A HIGH PRICE NICHE MARKET
THE INCREASING AMOUNT OF PRODUCE WOULD ADDITIONALLY LEAD TO CRUCIAL
MARKETING PROBLEMS DUE TO A MORE AND MORE SATURATED MARKET AND
CONSEQUENTLY A DECREASE IN THE AVERAGE SELLING PRICE
"ECAUSE THE /-) IS NOT ABLE TO COMPETE ON THE LEVEL OF PRICE THE
STRATEGY CHOSEN WAS OPTIMISATION OF EXISTING CAPACITIES TO ENSURE THE
MOST COST EFFECTIVE USAGE )N PRACTICE THIS MEANS lNDING A BALANCE
BETWEEN THE CAPACITY OF PRODUCTION PRODUCTION COSTS AS OPPOSED
TO THE CAPACITY OF PRODUCT MARKETING AT A COST EFFECTIVE PRICE LEVEL
!LTHOUGH IN GENERAL THERE SEEMS TO BE NO COMMON CONCEPT FOR /-)S
THE STRATEGY CHOSEN MUST MEET THE SPECIlC POTENTIALS AND CAPACITIES
IN THE SECTOR AND THE REGION

OR EXCLUSIVE PRODUCT STRATEGY AND THOSE FEW /-)S THAT ARE VOLUME
PLAYERS &OR BOTH GROUPS ECONOMIES OF SCALE ARE IMPORTANT (OW
EVER IF AN /-) IS A VOLUME PLAYER THE CONSISTENT MANAGEMENT OF
ECONOMIES OF SCALE SHOULD BE ONE OF THE MOST DRIVING AND IMPORTANT
ECONOMIC SUCCESS FACTORS ! SMALLER /-) WITH A QUALITY STRATEGY HAS
OTHER ADVANTAGES TO COMPENSATE FOR DISADVANTAGES FOR EXAMPLE
GREATER mEXIBILITY AND SPECIAL SERVICES THAT THE VOLUME PLAYER CANNOT
PROVIDE

%XTERNAL FACTORS
%XTERNAL FACTORS
%XTERNAL MARKET FACTORS GIVE /-)S A LIMITED DEGREE OF FREEDOM 4HEY

DETERMINE THE PATHS ALONG WHICH /-)S CAN MOVE AND EVEN SOME
TIMES FORCE /-)S TO CEASE TRADING EG WHEN FUNDING SOURCES DRY UP
OR NEW COMPETITORS ENTER THE MARKET NICHE OF /-) PRODUCTS
!N /-) SHOULD NOT BE FOUNDED SIMPLY IN ORDER TO APPLY FOR PUBLIC SUPPORT
PUBLIC FUNDING 0UBLIC FUNDING CAN BE A SUPPORT IN THE START UP FUNDING
PHASE BUT AN /-) SHOULD BE ABLE TO WORK PROlTABLY WITHOUT EX
TERNAL FUNDS FOR DETAILS OF PROBLEMS THAT CAN ARISE SEE ALSO #HAPTER
)T IS THEREFORE IMPORTANT NOT ONLY TO CALCULATE THE VIABILITY OF
AN /-) FOR PERIODS WITH PUBLIC FUNDING 3CENARIOS WITHOUT EXTERNAL
FUNDING POSSIBILITIES SHOULD ALSO BE CALCULATED AND RISK AVOIDANCE
STRATEGIES SHOULD BE DEVELOPED TO ASSURE THE LONG TERM EXISTENCE OF
AN /-) !NALYSIS OF /-)S THAT DID NOT SURVIVE AFTER AN INITIAL PERIOD
SHOW THAT LOSS OF PUBLIC FUNDING WAS THE MAIN REASON FOR THEIR FAILURE
AS WELL AS THE INABILITY OF THE /-) TO HANDLE THE SITUATION
4HERE MAY ONLY BE POTENTIAL TO OBTAIN MORE PUBLIC FUNDS IF AN
/-) IS PART OF A LARGER NETWORK FOR EXAMPLE WITH LOCAL PROCESSORS
OR TOURIST ORGANISATIONS 4HIS COULD EVEN MEAN THE CREATION OF A NEW
FORM OF CO OPERATION OR THE CLOSER INTEGRATION OF OTHER PARTNERS INTO
AN /-)S ORGANISATION #ONDITIONS IN DIFFERENT COUNTRIES CAN BE
QUITE VARIED SEE #HAPTER 4HE ADVANTAGES AND DISADVANTAGES OF
DIFFERENT FUNDS SHOULD BE EVALUATED EG THE RATE OF INTEREST ANDOR
REPAYMENT IN THE CASE OF CREDIT
)F FUNDS ARE AVAILABLE IT IS IMPORTANT TO CLARIFY WHICH INVEST
MENTS WILL BRING THE GREATEST RETURN )T MIGHT BE BETTER TO INVEST IN A
MARKETING CONCEPT RATHER THAN IN STORAGE BUILDINGS THAT COULD ALSO
BE RENTED
!S DESCRIBED IN DETAIL IN #HAPTER AN /-)S MARKET ENVIRON MACRO AND

MENT CAN BE ROUGHLY DIVIDED INTO A MACRO AND MICRO ENVIRONMENT MICRO
4HE MACRO ENVIRONMENT INCLUDES THE AGRICULTURAL POLICY ENVIRONMENT
FRAMEWORK ECONOMIC SOCIAL AND CULTURAL CONDITIONS SCIENTIlC
AND TECHNOLOGICAL ISSUES THE LEGAL FRAMEWORK AND THE NATURAL AND
DEMOGRAPHIC ENVIRONMENT !LL THESE ASPECTS DETERMINE THE SCOPE OF
STRATEGIC OPTIONS -ARKET ENVIRONMENTS ARE GENERALLY PREDETERMINED
HOWEVER BY EFFECTIVE LOBBYING AND NETWORK ACTIVITIES WHERE /-)S

ARE ABLE TO INmUENCE POLICY RELATED FACTORS AT LEAST WITHIN THEIR OWN
REGION
4HE MICRO ENVIRONMENT INCLUDES THE CUSTOMERS COMPETITORS
AND SUPPLIERS OF AN /-) )N CONTRAST TO THE MACRO ENVIRONMENT
AN /-) CAN INmUENCE THE MICRO ENVIRONMENT BY ITS OWN PERFORM
ANCE MESSAGES AND NEGOTIATION SKILLS 'ENERALLY SPEAKING AN /-)S
INmUENCE GROWS WHEN IT ACHIEVES GREATER MARKET POWER AND A RELATIVE
UNIQUENESS OF ITS PRODUCTS AND VICE VERSA
/-)S MUST IDENTIFY THE NEEDS OF THE MAIN CUSTOMERS WITHIN
IDENTIFY NEEDS THE TARGET GROUP WITH REGARD TO QUALITY PRICE AND SERVICES )T MUST
OF THE MAIN BE EMPHASISED THAT MARKETING STRATEGIES SHOULD LOOK FOR SELLING AT
CUSTOMERS TRIBUTES THAT MAKE AN /-)S PRODUCTS DISTINCT FROM THE COMPETITORS
PRODUCTS 4HIS IS BECAUSE CUSTOMERS COMPARE THE MARKET PERFORM
ANCE OF AN /-)S PRODUCTS WITH THE PERFORMANCE OF ITS COMPETITORS
3UCH SELLING ATTRIBUTES CAN BE HIGHER ORGANIC SOCIAL OR ENVIRONMENTAL
STANDARDS THAN THOSE PROVIDED BY COMPETITORS QUALITY BENElTS AND
OR SPECIlC REGIONAL IMAGE ADVANTAGES )N EACH CASE THE UNIQUE SELL
ING PROPOSITION MUST BE COMMUNICATED CLEARLY AND IN A WAY WHICH
MAKES THE MESSAGE EASILY UNDERSTANDABLE BY CUSTOMERS
)N EVERY COUNTRY CERTAIN REGIONS HAVE POSITIVE NEGATIVE OR NEU

REGIONAL SETTING TRAL IMAGES IN THE EYES OF CONSUMERS 4HE ATTRACTIVENESS OF A REGION IS
MAINLY INmUENCED BY ITS NATURAL BEAUTY AND IMPORTANCE FOR TOURISM
4HE EXISTING IMAGE OR CHARACTERISTICS OF A REGION ARE VERY IMPORTANT
FOR AN /-) AND SHOULD BE ANALYSED IN DETAIL !T LEAST WITH REGARD TO
THE MARKETING OF PRODUCTS DETAILED KNOWLEDGE ABOUT THE IMAGE OF
THE REGION WILL HAVE A POSITIVE EFFECT
)F THE REGION IS WELL KNOWN AND HAS A POSITIVE NATURAL IMAGE
USE POTENTIALS OF EVEN OUTSIDE THE REGION A REGIONAL MARKET APPROACH CAN BE VERY SUC
REGIONAL IMAGE CESSFUL 4HIS ALSO MEANS GENERALLY SPEAKING THAT PRODUCTS FROM THIS
FOR /-) TYPE OF REGION WILL BY PERCEIVED AS BEING OF HIGH NATURAL QUALITY )N
COMMUNICATION CONTRAST A REGION WITH A POOR IMAGE FOR EXAMPLE A HEAVILY INDUSTRIAL
REGION COULD BENElT FROM A FOCUSSED INTERNAL REGIONAL MARKETING AP
PROACH FOR CONSUMER GOODS OR AN INTER REGIONAL MARKETING APPROACH
CENTRED ON RAW MATERIALS FOR INDUSTRIAL PROCESSING OR A STRATEGY THAT
CONCENTRATES SIMPLY ON THE STEERING OF BIG SUPPLY VOLUMES 'ENERALLY
SPEAKING IT IS MORE DIFlCULT TO CONVINCE CONSUMERS OF NATURAL FOOD
QUALITY IN INDUSTRIAL REGIONS

!NNEX
!NNEX
2EFERENCES FOR FURTHER READING
!RMSTRONG ' AND +OTLER 0 -ARKETING n AN INTRODUCTION

TH EDITION .EW *ERSEY 0RENTICE (ALL %NGLISH LANGUAGE
4HIS BOOK PROVIDES A VERY DETAILED INTRODUCTION TO MARKETING !LL
IMPORTANT MARKETING CONCEPTS ARE DESCRIBED AND ILLUSTRATED WITH
EXAMPLES !LTHOUGH IT DOES NOT RELATE MARKETING TO AGRICULTURE IT IS
SUITABLE BOTH FOR BEGINNERS IN THE lELD AND FOR @PROFESSIONALS WHO
WANT TO BRUSH UP THEIR MARKETING KNOWLEDGE
"ECKER * -ARKETING +ONZEPTION TH ED -ÓNCHEN 6AHLEN

'ERMAN LANGUAGE
(AINES - -ARKETING FOR FARM AND RURAL ENTERPRISE

)PSWICH &ARMING 0RESS %NGLISH LANGUAGE
4HIS BOOK PROVIDES AN INTRODUCTION TO MARKETING IN THE CONTEXT
OF THE FARM BASED BUSINESS AS IT lNDS ITSELF INCREASINGLY EXPOSED TO
MARKET FORCES )T IS MANAGEMENT ORIENTED NOT THEORETICAL INTRODUC
ING MARKETING CONCEPTS AND TERMINOLOGY ONLY AS THEY ARE RELEVANT TO
THE OWNER MANAGED BUSINESS )T IS USEFUL FOR FARMERS WHO NEED TO
IMPROVE THEIR COMPETITIVE POSITION AND THEIR REVENUE FROM THE MAR
KET
(AMM 5 ,ANDWIRTSCHAFTLICHES -ARKETING 3TUTTGART

5LMER 6ERLAG 'ERMAN LANGUAGE
4HIS BOOK DEALS WITH THE BASICS OF AGRICULTURAL MARKETING !LL IMPOR
TANT ITEMS FROM THE PREPARATION OF THE DECISION BASIS FOR MARKETING
CONCEPTS UP TO THE DIFFERENT ACTION LEVELS OF MARKETING ARE CLEAR AND
STRUCTURED !S THE TITLE SAYS THE WHOLE BOOK IS RELATED TO AGRICULTURE
4HAT MEANS ALL MARKETING ITEMS ARE SPECIlCALLY DESCRIBED FOR BUSI
NESS IN AGRICULTURE %VEN THOUGH THIS BOOK IS MORE THAN YEARS OLD
IT IS AN EXCELLENT INTRODUCTION TO AGRICULTURAL MARKETING AND THEREFORE
THE BOOK IS VERY USEFUL TO /-)S

!NNEX
(ISRICH 2$ AND 0ETERS -0 %NTREPRENEURSHIP TH EDITION

.EW 9ORK -C'RAW (ILL )RWIN %NGLISH LANGUAGE
4HIS BOOK DESCRIBES HOW TO ESTABLISH A BUSINESS BEGINNING WITH HOW
TO SOURCE BUSINESS IDEAS AND WORKING THROUGH MANAGEMENT GROWTH
AND REALISING THE NEW VENTURE &INANCING MARKETING AND THE BUSINESS
PLAN ARE INCLUDED TOGETHER WITH MANY DETAILED EXAMPLES !LTHOUGH
THE BOOK DOES NOT RELATE DIRECTLY TO AGRICULTURE IT IS A VALUABLE RE
SOURCE FOR THOSE WHO ARE NEW TO ENTREPRENEURSHIP
(EUCHER - )LAR $ +UBR 4 -ARCHESI ( 0LANEN

GRÓNDEN WACHSEN n -IT DEM PROFESSIONELLEN "USINESSPLAN ZUM
%RFOLG AKTUALISIERTE !UmAGE :ÓRICH -C+INSEY #OMPANY 'ER
MAN LANGUAGE
4HIS BOOK DESCRIBES IN DETAIL HOW TO DEVELOP A BUSINESS PLAN )T TAKES
THE READER THROUGH THE PROCESS FROM THE FORMULATION OF THE BUSINESS
IDEA TO THE CONCEPTION OF THE NEW VENTURE AND INCLUDES BRIEF INFORMA
TION ON ASPECTS SUCH AS lNANCING MARKETING ETC )T IS RECOMMENDED
FOR ITS GUIDANCE ON THE DEVELOPING A PROFESSIONAL BUSINESS PLAN
+OTLER 0 -ARKETING -ANAGEMENT TH EDITION .EW *ERSEY

0RENTICE (ALL %NGLISH LANGUAGE
4HIS VOLUME REPRESENTS A BENCHMARK IN MARKETING )T PROVIDES A VERY
DETAILED DESCRIPTION OF MARKETING MANAGEMENT ASSISTING THE READER
IN ANALYSING MARKETING OPPORTUNITIES DEVELOPING MARKETING STRATE
GIES AND DELIVERING MARKETING PROGRAMMES !GAIN IT DOES NOT RELATE
DIRECTLY TO AGRICULTURE BUT IS RECOMMENDED FOR THOSE WHO WISH TO
EXPLORE MARKETING MORE DEEPLY
,EVICKI # 4HE INTERACTIVE STRATEGY WORKOUT n !NALYZE AND

$EVELOP THE lTNESS OF YOUR BUSINESS ,ONDON 0RENTICE (ALL %NG
LISH LANGUAGE
4HE BOOK GIVES A PRACTICAL SET OF GUIDELINES TO MANAGERS WHO HAVE
TO UNDERSTAND STRATEGY TO DO THEIR JOBS 5SING EASY TO FOLLOW
GUIDELINES THE BOOK IDENTIlES KEY APPROACHES TO ORGANISATIONAL
STRUCTURE RECURRING PATTERNS OF DIFlCULTIES IN IMPLEMENTING STRATE
GIES THE PROCESS OF STRATEGY ANALYSIS AND HOW TO MOST EFFECTIVELY
DEVELOP OBJECTIVES THAT WILL MAXIMISE A COMPANYS OPPORTUNITIES )T
ALSO POINTS OUT THE IMPORTANCE OF CREATIVITY TEAMWORK AND STRONG
LEADERSHIP

2EFERENCES
0ÓMPIN # 3TRATEGISCHE %RFOLGSPOSITIONEN n -ETHODIK DER

DYNAMISCHEN 5NTERNEHMENSFÓHRUNG "ERN 3TUTTGART (AUPT 'ER
MAN LANGUAGE
4HIS BOOK IS WRITTEN FOR DECISION MAKERS WHO STEER THE STRATEGIC
PROCESSES WITHIN A COMPANY 4HE PRINCIPLES AND PROCESS OF DYNAMIC
STRATEGY PLANNING AND ADOPTION ARE EXPLAINED CLEARLY AND CONCISELY
AND CASE STUDIES ARE USED TO ILLUSTRATE ALL THE MAIN IDEAS
2USSELL *ONES . &LETCHER 4 4HE MARKETING POCKETBOOK

(AMPSHIRE ,AUREL (OUSE %NGLISH LANGUAGE
4HE POCKETBOOK IS ABOUT THE FUNDAMENTALS OF MARKETING AND WILL
BE USEFULL TO EVERYONE WITH AN INTEREST IN THE lELD OF MARKETING
ESPECIALLY THOSE REQUIRING AN OVERVIEW OF THE MARKETING PROCESS
THOSE STARTING A MARKETING COURSE FOR WHOM IT WILL PROVIDE A BASIC
FRAMEWORK PEOPLE INTERESTED IN BUSINESS IN A GENERAL SENSE AND NON
MARKETERS WHO HAVE TO INPUT TO THE PROCESS OF MARKETING 'RAPHS AND
TABLES ARE USED TO ILLUSTRATE POINTS
3!" 3CHWEIZERISCHE !RBEITSGEMEINSCHAFT FÓR "ERGGEBIETE

(ANDBUCH 2EGIONAL -ARKETING "RUGG 3!" 'ERMAN LAN
GUAGE
4HE HANDBOOK OFFERS PRACTICAL MARKETING GUIDELINES FOR ALL MARKET
ACTORS WITHIN THE FOOD SECTOR FOCUSING ON REGIONAL MARKETS %ACH
CHAPTER PROVIDES A GENERAL OVERVIEW OF THEORETICAL CONCEPTS AND
EXAMPLES TRANSLATE THE THEORY INTO PRACTICE )T IS ALSO A VERY EASY READ
3CHMID / 3ANDERS * 2ICHTER 4 6ERMARKTUNGSINITIATIVEN

FÓR "IOPRODUKTE n "EISPIELE 3TRATEGIEN UND %RFOLGSFAKTOREN &RICK
&ORSCHUNGSINSTITUT FÓR BIOLOGISCHEN ,ANDBAU &I", 'ERMAN LAN
GUAGE
4HE BOOK IS WRITTEN FOR THE MARKETER OF ORGANIC PRODUCTS GENERALLY
AND FOR MANAGERS AND MEMBERS OF MARKETING INITIATIVES WHICH SELL
ORGANIC PRODUCTS AS WELL AS FOR THOSE INVOLVED IN POLICY AND THE BUSI
NESS ENVIRONMENT 4HE BOOK INTRODUCES DIFFERENT TYPES OF ORGANIC
MARKETING INITIATIVES SHOWS DIFFERENT CASE STUDIES OF SUCCESSFUL
MARKETING INITIATIVES IN 3WITZERLAND AND IDENTIlES AND DESCRIBES THE
MOST RELEVANT SUCCESS FACTORS FOR AN ORGANIC MARKETING INITIATIVE TO
SURVIVE WITHIN A CHALLENGING MICRO AND MACRO ECONOMIC ENVIRON
MENT

!NNEX
3YLVANDER " AND +RISTENSEN .( /RGANIC MARKETING

INITIATIVES IN %UROPE 6OLUME /-)A2$ 0UBLICATIONS !BERYSTWYTH
7ALES %NGLISH LANGUAGE
4HIS PUBLICATION IST MADE IN THE /-)A2$ %5 PROJECT GIVES A BROAD
OVERVIEW OF /RGANIC -ARKET )NITIATIVES IN %UROPE WHICH WERE THE
ONE OF THE SOURCE OF THIS HANDBOOK )N DEPTH STUDIES OF INITIATIVES IN
!USTRIA &RANCE )TALY AND 5+ GIVE AN INSIGHT IN THE FUNCTIONING AND
ACHIVEMENTS OF SUCH COLLABORATIVE ENTERPRISES

2EFERENCES
)NTERNET
52, HTTPENTREPRENEURSABOUTCOM 3TATUS !UTHOR

UNKNOWN %NGLISH LANGUAGE
4HIS SITE PROVIDES INFORMATION ON ENTREPRENEURS AND ENTREPRENEUR
SHIP ALTOUGH IT DOES NOT RELATE DIRECTLY TO AGRICULTURE )T PROVIDES AN
OVERVIEW OF WHAT AN ENTREPRENEUR MAY EXPECT BUT DOES NOT OFFER
PRACTICAL GUIDANCE ON DEVELOPING A BUSINESS
52, HTTPWWWAKADEMIEDEBUSINESSLINKSGRUENDUNGBUSINESS
PLANDE 3TATUS !UTHOR UNKNOWN 'ERMAN LANGUAGE
4HIS SITE OFFERS INFORMATION ON BUSINESS ACTIVITIES SUCH AS lNANCE
MARKETING PUBLIC RELATIONS AND GENERAL MANAGEMENT ALTOUGH IT DOES
NOT RELATE DIRECTLY TO AGRICULTURE

&IGURE ! $EVELOPMENT OF ORGANIC UTILISABLE AGRICULTURE AREA AS A PERCENTAGE OF THE 5!! FOR %UROPEAN NATIONS BETWEEN AND

3OURCE ,AMPKIN AND OWN DATA
!CCESSION %&4!
%5 COUNTRIES
%5 AV COUNTRIES COUNTRIES

!NNEX

!NNEX
0ERCENT

&IGURES ON THE %UROPEAN ORGANIC FOOD MARKET

!4 )4 &) $+ 3% 5+ $% ., 04 %3 "% ,5 &2 )% '2 %5 #: 3) #( ./
&IGURE ! 3HARE OF SALES OF ORGANIC PRODUCTS NOT SOLD AS ORGANIC IN THE %5 IN IN
3HEEP AND GOAT MEET
7INE
-ILK AND MILK PRODUCTS
"EEF INCL VEAL
/LIVES FOR OIL
&RUIT
/ILSEEDS
#EREALS
0ORK
6EGETABLES
&IGURES
0OTATOES
%GGS
0OULTRY

!NNEX
4ABLE ! /RGANIC PRODUCTS FOR WHICH THE AMOUNT OF NATIONAL PRODUCTION PLUS IMPORTS WERE EXPECTED TO BE INSUF
lCIENT TO MEET CONSUMER DEMAND IN THE YEARS AND
0RODUCT #OUNTRIES THAT MENTIONED A SUPPLY DElCIT FOR THIS PRODUCT

!CCESSION COUNTRIES AND
%5 COUNTRIES
%&4! COUNTRIES
#EREALS 3)
7HEAT $% 3)
"ARLEY $% 3)
2YE &) 3)
/ATS
/ILSEEDS $% &) 3%
/LIVES FOR OIL
0OTATOES $% 3% 3)
6EGETABLES $% &) )4 ., 04 3% 3)
&RUIT INCL NUTS $% &) ., 3% 5+ 3)
7INE 3)
-ILK %3 &) 3)
-ILK PRODUCTS %3 &) 3)
-EAT PRODUCTS %3 &) 3% 3)
"EEF INCL VEAL %3 &) 3)
3HEEP AND GOAT MEAT %3 04 3)
0ORK !4 "% $% %3 &) 04 3% 3)
0OULTRY $% 04 3% 3)
%GGS %3 3% 5+ 3)
!NIMAL FEED &) 5+
,EGUMINOUS FODDER CROPS
!4 $% )4 ., 5+
FOR EXAMPLE PEAS
&EED MIXTURES %3 )4 ., 04 5+
3EED $% &) )% )4 04 5+
/THERS &) #:

#ONVENIENCE FOOD PASTRY ICE CREAM lSH

#ONVENIENCE FOOD

&IGURES
4ABLE ! /RGANIC PLANT PRODUCTION AS A PERCENTAGE OF TOTAL PLANT PRODUCTION IN
/LIVES &RUIT
#OUNTRY #EREALS /ILSEEDS 0OTATOES 6EGETABLES 7INE
FOR OIL INCL NUTS
%5
!4 n
"% n
$% n
$+ n n
%3
&) n n
&2 ND
'2
)% n n n
)4 ND
,5 n
., n
04
3% n n
5+ n
%5
!CCESSION COUNTRIES
#: n
3)
%&4!
#( n
./ n n

)N BRACKETS /RGANIC SHARE OF THE TOTAL UTILISABLE AGRICULTURAL AREA 5!! IN FOR

'IVEN THAT WE HAD NO lGURES FOR SOME PRODUCTS IN SOME COUNTRIES THE PRODUCTION OF THESE COUNTRIES WHICH
ACCOUNTED FOR A CERTAIN PERCENTAGE OF TOTAL PRODUCTION WAS SUBTRACTED FROM THE TOTAL %5 PRODUCTION USED TO
CALCULATE THIS AVERAGE
ND NO DATA

!NNEX
4ABLE ! /RGANIC ANIMAL PRODUCTION AS A PERCENTAGE OF TOTAL ANIMAL PRODUCTION IN
-ILK "EEF 3HEEP AND

#OUNTRY 0ORK 0OULTRY %GGS
INCL VEAL GOAT MEAT
%5
!4
"%
$%
$+
%3
&)
&2
'2
)% ND
)4
,5
.,
04
3%
5+
%5
!CCESSION COUNTRIES
#:
3)
%&4!
#(
./

)N BRACKETS /RGANIC SHARE OF THE TOTAL UTILISABLE AGRICULTURAL AREA 5!! IN FOR

'IVEN THAT WE HAD NO lGURES FOR SOME PRODUCTS IN SOME COUNTRIES THE PRODUCTION OF THESE COUNTRIES WHICH
ACCOUNTED FOR A CERTAIN PERCENTAGE OF TOTAL PRODUCTION WAS SUBTRACTED FROM THE TOTAL %5 PRODUCTION USED TO
CALCULATE THIS AVERAGE

&IGURES
4ABLE ! 3HARE OF SALES OF ORGANIC PLANT PRODUCTION SOLD AS ORGANIC IN IN
/LIVES &RUIT 7INE

#OUNTRY #EREALS /ILSEEDS 0OTATOES 6EGETABLES
FOR OIL INCL NUTS
%5
!4 n
"% n
$% n
$+ n n
%3 ND
&) n n
&2 n
'2 ND
)% n n n
)4 ND
,5 n
., ND n
04
3% n n
5+ n ND
7EIGHTED

%5 AVERAGE
!CCESSION COUNTRIES
#: n ND
3)
%&4!
#( n
./ ND n n

7EIGHTED BY ORGANIC PRODUCTION
ND NO DATA

!NNEX
4ABLE ! 3HARE OF SALES OF ORGANIC ANIMAL PRODUCTION SOLD AS ORGANIC IN IN
"EEF 3HEEP AND

#OUNTRY -ILK 0ORK 0OULTRY %GGS
INCL VEAL GOAT MEAT
%5
!4
"%
$%
$+
%3
&)
&2
'2
)% ND
)4 ND
,5
.,
04
3%
5+
7EIGHTED

%5 AVERAGE
!CCESSION COUNTRIES
#: ND ND ND ND
3)
%&4!
#(
./

7EIGHTED BY ORGANIC PRODUCTION
ND NO DATA

&IGURES
4ABLE ! $EGREE OF SELF SUFlCIENCY IN ORGANIC PLANT PRODUCTS IN IN
/LIVES &RUIT
#OUNTRY #EREALS /ILSEEDS 0OTATOES 6EGETABLES 7INE
FOR OIL INCL NUTS
%5
!4 ND
"% ND ND
$%
$+ ND
%3 ND ND ND
&)
&2 ND ND ND
'2 ND ND ND
)%
)4 ND ND
,5
.,
04
3% ND
5+ ND ND
!CCESSION COUNTRIES
#: ND ND ND
3)
%&4!
#(
./
ND NO DATA

!NNEX
4ABLE ! $EGREE OF SELF SUFlCIENCY IN ORGANIC ANIMAL PRODUCTS IN IN
"EEF 3HEEP AND

#OUNTRY -ILK 0ORK 0OULTRY %GGS
INCL VEAL GOAT MEAT
%5
!4
"% ND
$%
$+
%3 ND
&)
&2 ND
'2
)% ND ND
)4
,5
.,
04
3%
5+
!CCESSION COUNTRIES
#: ND ND ND ND ND
3)
%&4!
#(

./
ND NO DATA

)NFORMATION
!NNEX
"ACKGROUND INFORMATION ON THE /-)A2$ PROJECT
4HE /RGANIC -ARKETING )NITIATIVES AND 2URAL $EVELOPMENT

/-)A2$ PROJECT WAS A SHARED COST RESEARCH PROJECT FUNDED BY THE
1UALITY OF ,IFE AND -ANAGEMENT OF ,IVING 2ESOURCES 0ROGRAMME
PART OF THE %UROPEAN 5NIONS &IFTH &RAMEWORK 0ROGRAMME FOR 2E
SEARCH AND 4ECHNOLOGICAL $EVELOPMENT )T TOOK PLACE FROM *ANUARY
TO &EBRUARY AND INVOLVED PARTNERS AND SUBCONTRAC
TORS FROM A TOTAL OF %UROPEAN COUNTRIES BOTH WITHIN AND OUTSIDE
THE %5
4HE 3CHOOL OF -ANAGEMENT AND "USINESS AT THE 5NIVERSITY OF 7ALES

!BERYSTWYTH 5NITED +INGDOM CO ORDINATED THE PROJECT 4HE OTHER
MAIN PARTNERS WERE
Q 0OLYTECHNIC 5NIVERSITY OF -ARCHE !NCONA )TALY
Q 5NIVERSITY OF +ASSEL 'ERMANY
Q .ATIONAL )NSTITUTE OF !GRICULTURAL 2ESEARCH ).2! ,E -ANS
&RANCE
Q 2ESEARCH )NSTITUTE OF /RGANIC !GRICULTURE &I", 3WITZERLAND
Q -IKKELI )NSTITUTE FOR 2URAL 2ESEARCH AND 4RAINING 5NIVERSITY OF
(ELSINKI &INLAND
Q )NSTITUTE FOR (IGH -OUNTAIN 2ESEARCH 5NIVERSITY OF )NNSBRUCK
!USTRIA
Q $EPARTMENT OF 4ECHNOLOGY AND 3OCIAL 3CIENCES ,YNGBY 4ECH
NICAL 5NIVERSITY OF $ENMARK
Q )NSTITUTE FOR 4RADE AND -ARKETING 5NIVERSITY OF )NNSBRUCK
!USTRIA
Q 5NIVERSITY OF !PPLIED 3CIENCES (AMBURG 'ERMANY
DETAILED ADDRESSES SEE ANNEX
4HE TWO MAJOR AIMS WERE TO INVESTIGATE POTENTIALS FOR DEVELOP 7HAT WERE
ING THE ENVIRONMENTAL ETHICAL AND REGIONAL PRODUCT CHARACTERISTICS THE MAIN AIMS
OF ORGANIC FARM OUTPUTS AND TO IDENTIFY AND CONTRIBUTE TO THE DE
VELOPMENT OF MARKETING INSTITUTIONS AND STRATEGIES THAT CORRESPOND
TO THE SATISFACTION OF THE GROWING DIMENSIONS OF CONSUMER DEMAND
4HE PROJECT WAS DESIGNED TO PRODUCE WORKABLE RESULTS FOR IMPROVED
MARKETING AS WELL AS TO INFORM POLICYMAKERS

!NNEX
$URING THE PROJECT MANY MARKETING INITIATIVES LARGE AND SMALL

FROM EVERY PART OF THE ORGANIC FOOD CHAIN WERE ANALYSED TO EXPLORE
THE PROBLEMS AND OPPORTUNITIES THEY FACE 4HE PROJECT TEAM WAS ALSO
7HAT WAS DONE INTERESTED IN lNDING CONSUMERS TO JOIN DISCUSSION GROUPS EXPLORING
ATTITUDES AND BEHAVIOUR IN PURCHASING AND USING ORGANIC PRODUCTS
&INALLY TO DEVELOP A FUTURE PROOF OVERALL STRATEGY PEOPLE IN KEY POSI
TIONS OR WITH SPECIAL EXPERTISE WERE ASKED TO JOIN IN AN EXPERT PANEL TO
COMMENT ON OUR WORK THROUGH SEVERAL CONSULTATION ROUNDS $ETAILS
OF THE METHODOLOGICAL THEORETICAL APPROACHES ARE DISCUSSED IN THE
FOLLOWING PARAGRAPHS
TARGET GROUP -ETHODOLOGICAL APPROACH OF THE /-)A2$ PROJECT

ORGANIC MARKET ! MAJOR PART OF THE /-)A2$ PROJECT WAS THE ANALYSIS OF h/RGANIC
ING INITIATIVES -ARKETING )NITIATIVESv /-)S TO ACHIEVE THE FOLLOWING OBJECTIVES
Q 4O ANALYSE WHETHER ORGANIC MARKETING INITIATIVES CAN CONTRI

BUTE TO THE DEVELOPMENT OF RURAL AREAS THROUGHOUT %UROPE
AND WHAT STRATEGIES ARE PLANNED FOR THE INITIATIVES 4HIS SURVEY
CONTRIBUTES TO THE OVERALL AIM BY IDENTIFYING A RANGE OF /-)S
IN ALL COUNTRIES BEING STUDIED AND IN SO DOING PROVIDES AN AC
COUNT OF THE KEY CHARACTERISTICS AND THE CURRENT STATE OF /-)S
THROUGHOUT %UROPE
Q 4O IMPROVE KNOWLEDGE OF SUCCESS FACTORS IN MARKETING BY COM

PARATIVE NARRATIVE CASE STUDY ANALYSES IN REGIONS SELECTED TO IL
LUSTRATE THE DIVERSITY OF CONDITION AND NEEDS DISTINGUISHING LO
CAL CONTEXTUAL FACTORS FROM TRANSFERABLE PRACTICE AND FOCUSING
ON INDIVIDUAL COMMODITIES OR COMMODITY GROUPS DISTRIBUTION
CHANNELS AND PROMOTIONAL STRATEGIES
Q 4O IDENTIFY THE CONTRIBUTION OF /-)S TO SUSTAINABLE RURAL DEVEL

OPMENT USING FORMAL TECHNIQUES OF INCOME AND EMPLOYMENT
AND OTHER ANALYSIS METHODS TO ENCOMPASS lNANCIAL PHYSICAL
ENVIRONMENTAL SOCIAL AND CULTURAL VARIABLES INCLUDING REGIONAL
IDENTITY
Q 4O DEVELOP A MARKETING GUIDELINE FOR NEWLY FOUNDED AND ESTAB

LISHED /-)S USING THE INFORMATION GATHERED ABOUT FACTORS OF
SUCCESS AND FAILURE IN ESTABLISHED /-)S

)NFORMATION
4HE EVALUATION OF THE /-)S WAS CARRIED OUT IN THREE MAIN STAGE
WHICH ARE BRIEmY DESCRIBED IN lGURE ! AND THE FOLLOWING TEXT
-AIN STEPS IN THE EVALUATION OF /-)S IN %UROPE
34%0
/VERVIEW OF EXISTING /-)S IN %UROPEUSING SOME SELECTION CRITERIA
AND THE DEFINITION OF AN /-)
34%0
%VALUATION AND ANALYSIS OF SELECTED /-)S ON THE BASIS
OF THEIR SUCCESSFAILURE
34%0
3ELECTION OF /-)S FOR AN IN DEPTH
ANALYSIS
&IGURE ! -AIN STEPS OF THE EVALUATION OF /-)S IN %UROPE
)N THE lRST STEP THE RESEARCHERS TRIED TO IDENTIFY AS MANY IDENTIFY /-)S
/-)S AS POSSIBLE IN THE WHOLE OF %UROPE BY USING SOME SELECTION ALL OVER %UROPE
CRITERIA AND THE DElNITION OF AN /-) 3OURCES WERE LITERATURE THE
INTERNET FARMERS ORGANISATIONS AND ALSO SOME KEY INFORMANTS WHO
HAD ALREADY BEEN IDENTIlED AT THE START OF THE PROJECT 4HE WORK
ING HYPOTHESIS WAS THAT THE INITIATIVES SHOULD NOT BE TOO SMALL AND
SHOULD SELL A LARGE PROPORTION OF THEIR PRODUCE AS ORGANIC )N THE SEC
OND ROUND CONDUCTED MONTHS LATER THE CRITERIA WERE CHANGED A
LITTLE TO INCREASE THE PARTICIPATION OF INITIATIVES AND TO INCLUDE YOUNG
ER INITIATIVES )N GENERAL THE CRITERIA APPLIED IN THE lRST ROUND CON
SIDERABLY RESTRICTED THE NUMBER OF /-)S INCLUDED PARTICULARLY AS IT
BECAME APPARENT THAT LARGE NUMBERS OF THE /-)S INITIALLY IDENTIlED
BY RESPONDENTS ESPECIALLY IN SOME COUNTRIES FELL BELOW THE TURN
OVER THRESHOLD AND IN OTHERS A LARGE SHARE OF THE MARKET VOLUME OF
ORGANIC FOODS APPARENTLY PASSES THROUGH LARGER MAINLY CONVENTIONAL
FOOD PROCESSORS AND DISTRIBUTORS 4HEREFORE IT SHOULD BE BORNE IN
MIND THAT THE SURVEY DOES NOT REPRESENT THE OVERALL STRUCTURE OF THE
MARKETING OF ORGANIC PRODUCE IN %UROPE BUT RATHER IDENTIlES THE

!NNEX
PARTICULAR /-)S THAT ARE THE FOCUS OF INTEREST OF THIS RESEARCH THESE
IN TOTAL ACCOUNT FOR ONLY A LIMITED PROPORTION OF THE TURNOVER OF THE
ORGANIC MARKET
4HE SECOND STEP WAS THE ANALYSIS AND EVALUATION OF SELECTED
ANALYSING /-)S !T lRST THE RESEARCHERS DEVELOPED MORE SPECIALISED CRITERIA FOR
SELECTED /-)S DElNING AND SELECTING /-)S ON THE BASIS OF THEIR SUCCESSFAILURE ECO
NOMICALLY SOCIALLY AND ENVIRONMENTALLY AND THEIR REGIONAL CONTEXT
THE OPPORTUNITIES AND THREATS INVOLVED IN THE DEVELOPMENT OF SMALL
SCALE MARKETING INITIATIVES IN DISADVANTAGED REGIONS AND THE EXTENT
OF CURRENT UTILISATION OF MARKET POTENTIAL 3ECONDLY AN EXTENSIVE
SURVEY ANALYSIS OF /-)S IN UP TO REGIONS WAS CARRIED OUT MAKING
COMPARISONS WITHIN EACH COUNTRY AND BETWEEN COUNTRIES TO ESTABLISH
THE FACTORS INmUENCING THE SUCCESS OF MARKETING INITIATIVES /-)S THAT
WERE EVALUATED DURING THIS SECOND STEP ARE USED FOR THE MARKETING
GUIDELINE !S EXAMPLES OF THE SUCCESS OR FAILURE OF AN INITIATIVE THEY
DEMONSTATE HOW THE THEORY WORKS OR DOES NOT WORK IN PRACTISE
&OUR /-)S WERE SELECTED FOR AN IN DEPTH ANALYSIS FROM THOSE

IN DEPTH STUDIES IDENTIlED IN THE PREVIOUS SURVEY 5SING A VARIETY OF SOURCES DOCU
OF FOUR /-)S MENTARY MATERIAL ETC A DESCRIPTIVE AND ANALYTIC ACCOUNT OF EACH
MARKETING INITIATIVE WAS DEVELOPED %MPHASIS WAS GIVEN TO THE HIS
TORICAL NARRATIVE OF THE INITIATIVES DEVELOPMENT THE REGIONAL SOCIO
ECONOMIC CONTEXT THE CURRENT STRUCTURE OF THE RELATIONSHIP BETWEEN
ACTORS AND PRODUCTION DISTRIBUTION AND PROMOTION ACTIVITIES 4HE
ANALYSIS ALSO SHOWED HOW THE FOLLOWING FACTS SUPPORT THE RELATIVE
SUCCESS OF THE /-)
!TTENTION WAS ALSO GIVEN TO HOW THE /-) BENElTS THE INDI
VIDUAL ACTORS INVOLVED THE NETWORK AS A WHOLE AND THE OVERALL GOALS
MARKET STRUCTURE OVERALL MARKET CONTEXT

SUPPORT FRAMEWORK INCLUDING
COMMUNICATION
EXTENSION SERVICES
SOCIAL AND ENVIRONMENTAL
STRATEGIC APPROACH
ORIENTATION
PRICING POLICY CULTURAL FACTORS
IMPORTANCE OF DEVELOPMENT OF CO ORDINATION AND MANAGEMENT OF
HUMAN SKILLS IN ENSURING SUCCESS THE INITIATIVE

)NFORMATION
OF REGIONAL DEVELOPMENT 4HE CASE STUDY ALSO INCLUDED AN EVALUATION

OF THE POTENTIAL OF THE /-) FOR THE FUTURE EXAMINING STRENGTHS AND
WEAKNESSES AND OPPORTUNITIES AND THREATS
4HE INmUENCE OF THE SELECTED /-)S ON RURAL DEVELOPMENT WAS WHICH INmUENCE
ALSO PART OF THE IN DEPTH ANALYSIS )N EACH CASE STUDY DOCUMENTARY /-)S HAVE ON
EVIDENCE AND SEMI STRUCTURED INTERVIEWS WITH KEY ACTORS REPRESEN RURAL DEVELOP
TING PRODUCERS AND MARKETING PROCESSING AND DISTRIBUTION INTERESTS MENT
IN POLICY NETWORKS WERE COMBINED TO IDENTIFY SPECIlC POLICY MIXES
INCLUDING %UROPEAN NATIONAL AND REGIONAL ACTIONS FOR RURAL DEVELOP
MENT 3PECIAL ATTENTION WAS ALSO GIVEN TO THE PERFORMANCE OF /-)S
IN TERMS OF THEIR INTERACTION WITH OTHER RURAL DEVELOPMENT INITIATIVES
INNOVATION QUALITY CONTRIBUTION TO OVERALL STRATEGIES AND THE EXTENT
OF PARTICIPATION AND DECISION MARKETING 4HE SOCIAL EFFECTS OF THE
/-) SUCH AS ITS RELATIONSHIP WITH REGIONAL ENVIRONMENTAL POLICIES
WERE ALSO PART OF THE CASE STUDY
4HE MARKET ANALYSIS AND CONSUMER RESEARCH ACTIVITIES WITHIN MARKET AND CON
THE PROJECT WERE ALSO IMPORTANT IN DElNING THE BASIC CONDITIONS UN SUMER RESEARCH
DER WHICH /-)S OPERATE ACTIVITIES
!LTHOUGH THE AREA DEVOTED TO ORGANIC PRODUCTION HAS INCREASED

MORE THAN lVE FOLD BETWEEN AND AND ORGANIC FARM
ING NOW RECEIVES ADDITIONAL lNANCIAL SUPPORT IN MOST %UROPEAN
COUNTRIES IT WAS VIRTUALLY IMPOSSIBLE TO OBTAIN ACCURATE DATA ABOUT
ORGANIC MARKETS FROM OFlCIAL STATISTICS 4YPICALLY THE ONLY OFlCIAL
DATA DESCRIBE THE NUMBER OF ORGANIC FARMS AND THEIR AREA PUBLISHED
STATISTICS ON ORGANIC PRODUCTION CONSUMPTION IMPORTS EXPORTS
AND PRICES DO NOT EXIST AND THEREFORE THE RESEARCHERS TRIED TO COLLECT
THE MISSING DATA /N THE BASIS OF A PREVIOUS SURVEY THEY SENT QUES
TIONNAIRES TO A NUMBER OF MARKET EXPERTS IN EACH OF THE NINETEEN
COUNTRIES INVESTIGATED 4HE RESPONSE FROM THE MARKET EXPERTS WAS
CROSS CHECKED FOR RELIABILITY AND IN MANY CASES THE RESEARCHERS HAVE
OBTAINED ADDITIONAL DATA FROM THE INTERNET AND OTHER SOURCES 4HE
RESULTS OF THE MARKET ANALYSIS CAN BE FOUND IN THE BOOK h!NALYSIS OF
THE %UROPEAN MARKET FOR ORGANIC FOODv 6OLUME 4HE %UROPEAN
-ARKET FOR /RGANIC &OOD 2EVISED AND 5PDATED !NALYSIS

&URTHER DETAILS CAN BE FOUND AT THE PROJECT WEBSITE HTTPWWWIRSABERACUKOMIARD

!NNEX
4HE PROSPECTIVE INVESTIGATION OF CONSUMER DEMAND TRENDS

FOR AND ATTITUDES TOWARDS ORGANIC PRODUCTS AND ORGANIC FARMING IS
IMPORTANT FOR /-)S )F THE /-) DOES NOT KNOW WHAT THE CONSUM
ERS EXPECT AND DEMAND IT IS NOT POSSIBLE FOR THE /-) TO SATISFY THEIR
NEEDS "ASED ON A SPECIAL MEANS END ANALYSIS TECHNIQUE LADDERING
THE MOTIVATIONS OF THE CONSUMERS FOR BUYING OR NOT BUYING ORGANIC
PRODUCTS WITH PARTICULAR EMPHASIS ON QUALITY DISTRIBUTION CHANNELS
REGIONAL ORIGIN ENVIRONMENT AND HEALTH WERE EXPLORED &URTHER DATA
WERE COLLECTED BY MEANS OF FOCUS GROUPS WITH SUB GROUPS OF REGULAR
OCCASIONAL AND NON CONSUMERS OF ORGANIC FOOD IN URBAN AND RURAL
REGIONS IN EACH PARTNER COUNTRY TO UNCOVER THEIR COGNITIVE STRUC
TURES
4HE RESULTS OF THE STUDY OF /-)S IN %UROPE THE ANALYSIS OF THE

MARKET FOR ORGANIC PRODUCTS IN %UROPE AND THE CONSUMER RESEARCH
COMBINE TO FORM THE BASIS OF THIS MARKETING HANDBOOK

0UBLICATIONS
!NNEX
0UBLICATIONS
! SERIES OF REPORTS HAVE BEEN PUBLISHED OVER THE THREE YEAR DURATION
OF THE /-)A2$ PROJECT
Q !NALYSIS OF THE %UROPEAN MARKET FOR ORGANIC FOOD

)N PROVIDING THE MOST COMPREHENSIVE AND UP TO DATE INFOR
MATION AND ANALYSIS OF %UROPEAN ORGANIC FOOD MARKETS THIS
VOLUME OFFERS IMPORTANT INFORMATION IN ITS OWN RIGHT BUT ALSO
CONTRIBUTES A FOUNDATION FOR FURTHER STUDY )T COVERS ALL IMPOR
TANT ASPECTS OF THE ORGANIC MARKET INCLUDING PRODUCTION CON
SUMPTION FOREIGN TRADE SUPPLY DElCITS PRICES AND PREMIUMS
.INETEEN COUNTRIES HAVE BEEN SEPARATELY INVESTIGATED AND COM
PARISON AND OVERVIEW ALLOW IMPORTANT POLICY AND MARKETING
CONCLUSIONS TO EMERGE
Q /RGANIC -ARKETING )NITIATIVES IN %UROPE

4HIS VOLUME DRAWS TOGETHER THE RESULTS OF THE EXTENSIVE SURVEYS
OF /RGANIC -ARKETING )NITIATIVES /-) CARRIED OUT IN THE
WINTER OF AND UP DATED IN WINTER WITH THE MORE
DETAILED SURVEY OF /-)S IN REGIONS IN %UROPE CARRIED OUT
IN THE WINTER OF AND THE IN DEPTH CASE STUDIES CON
DUCTED IN TO CREATE AN OVERALL PICTURE OF THE SITUATION OF
/-)S ACROSS %UROPE
Q /RGANIC 0RODUCER )NITIATIVES AND 2URAL $EVELOPMENT n FOUR

%UROPEAN #ASE 3TUDIES
4HIS IS AN ASSESSMENT OF THE RURAL DEVELOPMENT IMPACTS OF /R
GANIC -ARKETING )NITIATIVES /-) BASED UPON IN DEPTH CASE
STUDIES CARRIED OUT IN !USTRIA &RANCE )TALY AND THE 5+ DURING

Q 4HE %UROPEAN #ONSUMER AND /RGANIC &OOD

4HIS VOLUME DRAWS TOGETHER THE lNDING OF THE SCENARIO ANALYSIS
AND CONSUMER STUDIES INCLUDING FOCUS GROUPS AND LADDERING
INTERVIEWS CARRIED OUT THROUGHOUT %UROPE

!NNEX
Q 4HE %UROPEAN -ARKET FOR /RGANIC &OOD 2EVISED AND 5P

DATED !NALYSIS
4HIS VOLUME BUILDS ON THE FOUNDATION OF THE lRST VOLUME PRO
VIDING UPDATED INFORMATION AND ANALYSIS OF %UROPEAN ORGANIC
FOOD MARKETS FOR AND COMPARISION WITH DATA COLLECTED FOR

Q /RGANIC -ARKETING )NITIATIVES AND 2URAL $EVELOPMENT

4HIS BOOK IS THE CONCLUDING VOLUME IN THE SERIES OF REPORTS
PRODUCED BY THE %UROPEAN #OMMISSION CO FUNDED PROJECT OF
THE SAME NAME !S WELL AS SUMMARISING THE MAIN lNDINGS OF
THE RESEARCH PROJECT IT ALSO INCLUDES SOME MATERIAL EXPLORING
FUTURE %UROPEAN PROSPECTS FOR THE ORGANIC MARKET AND POLICY
REFORM IN AGRICULTURE 4HE VOLUME INCLUDES COMPREHENSIVE
ANALYSIS OF ORGANIC MARKETING INITIATIVES IN %UROPE OUTLINING
THEIR IMPORTANT ROLE IN RURAL REGIONS )T REPORTS THE RESULTS OF
THE INVESTIGATION OF THE CURRENT MARKET CONDITIONS FOR ORGANIC
PRODUCTS IN %UROPE AND THE STRATEGIES ADOPTED BY THE /-)S IN
RESPONSE TO THEM )T ALSO EXAMINES FACTORS INmUENCING SUCCESS
OR FAILURE OF ORGANIC MARKETING INITIATIVES )T CONCLUDES THAT
FOR INITIATIVES STRENGTHENING THEIR ETHICAL BASIS TO DEAL WITH
INCREASED COMPETITION REDUCING DEPENDENCY ON SUPERMAR
KETS RESPONDING TO GROWING DEMANDS FOR CONVENIENCE FOOD
AND IMPROVING PRICE COST RELATIONS ARE ALL IMPORTANT REQUIRE
MENTS 0OLICY REFORM SHOULD TAKE ACCOUNT OF THE POTENTIAL OF
THESE BUSINESSES BY IMPROVING MARKET INTELLIGENCE SUPPORTING
KNOWLEDGE TRANSFER HELPING TO IMPROVE CONSUMER EDUCATION
FACILITATING NETWORKING AND USING PUBLIC PROCUREMENT AS A CATA
LYST FOR DEVELOPMENT
0UBLICATIONS CAN BE ORDERED FROM THE PROJECT WEBSITE AT HTTP

WWWIRSABERACUKOMIARD

EU OMIaRD Publication Marketing-Initiatives 2004

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/RGANIC -ARKETING )NITIATIVES

AND 2URAL $EVELOPMENT

!UTHORS /TTO 3CHMID AND 4ORALF 2ICHTER &I", &RICK 3WITZERLAND

#ONTRIBUTORS TO #HAPTER  AND 

%XAMPLES OF ORGANIC MARKETING INITIATIVES /-)A2$ 0ROJECT 4EAM

#OVER DESIGN AND LAYOUT $ANIEL 'ORBA &I", &RICK 3WITZERLAND

Ú /TTO 3CHMID 4ORALF 2ICHTER 5LRICH (AMM !NDREA $AHLKE 

#HAPTER  !NALYSIS OF THE MARKET AND POLICY ENVIRONMENT

#HAPTER  3UCCESSFUL MARKETING DEVELOPMENT

#HAPTER  +EY FACTORS OF SUCCESS 

0ROF $R 5LRICH (AMM AND -3C !NDREA $AHLKE

4HIS PUBLICATION DOES NOT NECESSARILY REmECT THE %UROPEAN

4HE BACKGROUND OF THIS HANDBOOK DERIVES FROM THE RESULTS OF A %U

4HE RAPID INCREASE IN PRODUCTION OF ORGANIC FOOD IS CREATING

4HERE ARE SEVERAL ADVANTAGES OF MARKETING THROUGH COLLECTIVE

/RGANIC -ARKETING )NITIATIVE ÀKO +ORN .ORD IN 'ERMANY 0HOTO $ -ENZLER

Q "ETTER COLLECTION OF SUPPLY

&OR ORGANIC FARMERS INVOLVEMENT IN COLLECTIVE MARKETING HAS

/RGANIC MARKETING INITIATIVES AND SUSTAINABLE DEVELOPMENT

4HOUGH SUSTAINABILITY IS A MUCH USED WORD IT COVERS A WIDE RANGE OF

TO FARMERS )F INITIATIVES GET INVOLVED IN PROCESSING MORE OF THE VALUE

0ROFESSOR 0ETER -IDMORE #O ORDINATOR OF THE /-)A2$ PROJECT

Q &ARMERS INVOLVED IN COLLECTIVE MARKETING

!S A CONSEQUENCE WE ARE NOT WRITING FOR SPECIALIST READERS

4HE PURPOSE OF THE HANDBOOK IS TO GIVE GUIDANCE FOR PLAYERS

#HAPTER  INTRODUCES THE BACKGROUND AND OBJECTIVES OF THE

 THE PRE START OR PREPARATORY PHASE

)N PARTICULAR IN THE PRE START PHASE WE SHOW HOW TO IDENTIFY A

SATION IS EXPLORED AND THE BEST WAYS TO PREPARE IMPLEMENTATION OF

 /RGANIC FOOD MARKET IN %UROPE

$EVELOPMENTS OF THE MARKET FOR ORGANIC FOOD ARE OF GREAT IMPOR

/RGANIC PRODUCTION HAS SHOWN REMARKABLE GROWTH IN THE S REMARKABLE

7HAT DOES A HIGH ORGANIC UTILISED AGRICULTURAL AREA IN A SPECIlC

#ERTIlED ORGANIC AREA IS ONLY A ROUGH INDICATOR OF ORGANIC PRO

(IGH PRODUCTION SHARES FOR ORGANIC PRODUCTS DO ILLUSTRATE

7HAT DOES OVERSUPPLY IN A SPECIlC COUNTRY MEAN FOR AN /-)

&IGURE ! IN THE ANNEX GIVES AN OVERVIEW OF THE PERCENTAGE OF

7HAT DO SUPPLY DElCITS MEAN FOR AN /-) IN A SPECIlC COUNTRY

PORTS FROM FOREIGN COUNTRIES WOULD BE INSUFlCIENT TO MEET CONSUMER

4HE NATIONAL DEGREE OF SELF SUFlCIENCY AS REGARDS ORGANIC FOOD

7HAT DOES A LOW AND HIGH DEGREE OF SELF SUFlCIENCY IN A SPECIlC

 #ONSUMER MOTIVES AND BARRIERS TO BUY ORGANIC

-OTIVATING FACTORS FOR BUYING ORGANIC PRODUCTS

4HE /-)A2$ PROJECT CONSUMER SURVEYS 0HOTO 4 2ICHTER

ADDITIVES SPECIAL METHOD OF PROCESSING  4HE HEALTH ISSUE FOR CON

FACTOR WHEN BUYING DAIRY PRODUCTS AND ESPECIALLY WHEN IT COMES TO

)N MOST %UROPEAN COUNTRIES ENVIRONMENTAL CONCERNS ARE A ENVIRONMENTAL

4RUST CAN BE MENTIONED AS A MOTIVATING FACTOR BUT ALSO AS A TRUST AS A

2EGULAR CONSUMERS OF ORGANIC FOOD ESPECIALLY SEE THE PREMIUM

"ARRIERS TO BUYING ORGANIC PRODUCTS

4HE PRICE OF ORGANIC FOOD IS EITHER TOO HIGH OR THE CONSUMERS

BY THE PRECISE BUYING SITUATION AS ILLUSTRATED BY THIS 3WISS RESPON

,ACK OF AVAILABILITY IS ALSO A STRONG ARGUMENT FOR NOT BUYING AVAILABILITY AS

CONSUMPTION IS ASSOCIATED WITH INCONVENIENCE 4HIS IS CONNECTED

)MPLICATIONS FOR /-)S

&OR MANY CONSUMERS IN ALL %UROPEAN COUNTRIES PRICE IS THE

$ISTRUST IS ANOTHER BARRIER TO BUY ORGANIC PRODUCTS ! MAIN IMPROVED

/CCASIONAL CONSUMERS ESPECIALLY CRITICISE THE AVAILABILITY OF IMPROVED

MOTORWAY STOPS !NOTHER POSSIBILITY FOR AROUSING THE INTEREST OF THE

Q 4HE ADDITIONAL VALUE OF ORGANIC PRODUCTS MUST BE COM

 #ONSUMER ATTITUDES TOWARDS REGIONAL ORGANIC

)N MOST %5 COUNTRIES THERE IS A GENERAL AGREEMENT THAT THE ORIGIN OF

CONSUMER Q PRODUCT QUALITY FRESHNESSSHELF LIFE PURITY

0RODUCT QUALITY IS AN IMPORTANT TOPIC AS REGARDS REGIONAL PRO

#ONTRIBUTORS TO #HAPTER AND

%XAMPLES OF ORGANIC MARKETING INITIATIVES /-)A2$ 0ROJECT 4EAM

#OVER DESIGN AND LAYOUT $ANIEL 'ORBA &I", &RICK 3WITZERLAND

Ú /TTO 3CHMID 4ORALF 2ICHTER 5LRICH (AMM !NDREA $AHLKE

#HAPTER !NALYSIS OF THE MARKET AND POLICY ENVIRONMENT

#HAPTER 3UCCESSFUL MARKETING DEVELOPMENT

#HAPTER +EY FACTORS OF SUCCESS

0ROF $R 5LRICH (AMM AND -3C !NDREA $AHLKE

/RGANIC -ARKETING )NITIATIVE ÀKO +ORN .ORD IN 'ERMANY 0HOTO $ -ENZLER

TO FARMERS )F INITIATIVES GET INVOLVED IN PROCESSING MORE OF THE VALUE

!S A CONSEQUENCE WE ARE NOT WRITING FOR SPECIALIST READERS

#HAPTER INTRODUCES THE BACKGROUND AND OBJECTIVES OF THE

THE PRE START OR PREPARATORY PHASE

/RGANIC FOOD MARKET IN %UROPE

/RGANIC PRODUCTION HAS SHOWN REMARKABLE GROWTH IN THE S REMARKABLE

7HAT DOES OVERSUPPLY IN A SPECIlC COUNTRY MEAN FOR AN /-)

&IGURE ! IN THE ANNEX GIVES AN OVERVIEW OF THE PERCENTAGE OF

7HAT DO SUPPLY DElCITS MEAN FOR AN /-) IN A SPECIlC COUNTRY

#ONSUMER MOTIVES AND BARRIERS TO BUY ORGANIC

4HE /-)A2$ PROJECT CONSUMER SURVEYS 0HOTO 4 2ICHTER

ADDITIVES SPECIAL METHOD OF PROCESSING 4HE HEALTH ISSUE FOR CON

CONSUMPTION IS ASSOCIATED WITH INCONVENIENCE 4HIS IS CONNECTED

$ISTRUST IS ANOTHER BARRIER TO BUY ORGANIC PRODUCTS ! MAIN IMPROVED

MOTORWAY STOPS !NOTHER POSSIBILITY FOR AROUSING THE INTEREST OF THE

#ONSUMER ATTITUDES TOWARDS REGIONAL ORGANIC

CONSUMER Q PRODUCT QUALITY FRESHNESSSHELF LIFE PURITY

THEY MAKE CONCESSIONS REGARDING WHAT THEY UNDERSTAND BY ORIGIN

BE THE MAIN ATTRIBUTES OF THE /-)S PRODUCTS &IGURE P SHOWS

-ARKETING INSTRUMENTS ARE VERY IMPORTANT AT THIS POINT )N USING REGIONAL

%5 SUPPORT POLICIES FOR RURAL DEVELOPMENT

IT WANTS TO BE CO lNANCED BY THE %5 IN THE FOLLOWING AREAS A IN

Q 4HE %UROPEAN 2EGIONAL $EVELOPMENT &UND %2$& WHICH

7HICH %5 PROGRAMMES CAN BE OF MAJOR RELEVANCE FOR /-)S

EVEN REGIONAL LEVEL 'OVERNMENT SUPPORT MUST BE IN LINE WITH ONE OF

REGIONALLY BASED PARTICIPATIVE AND INTEGRATIVE BOTTOM UP APPROACH

!RTICLE MEASURES AIM TO DIRECTLY SUPPORT THE ACTIVITIES OF THE POTENTIAL OF

0RE START PHASE

6ISION BUSINESS IDEA

-ILK HERBS AND A MOUNTAIN n A COMBINATION WHICH ATTRACTS MANY CONSUMERS

Q NO MANNER OF CRITICISM POSITIVE OR NEGATIVE IS ALLOWED

4HIS METHOD IS VERY COMPLEX ! MODERATOR LEADS A GROUP OF

Q PUT TO OTHER USES NEW WAYS TO USE OTHER USES IF MODIlED

&OR THE /-) INITIATORS IT IS VERY IMPORTANT TO DEVELOP A NET

VERTICAL PIG FARMER HORIZONTAL PIG FARMER

&IGURE "ASIC FORMS OF CO OPERATION

@"IO"OURGOGNE 6IANDE &RANCE

3TEP n $ECISION TO ADOPT A FORM OF CO OPERATION

3TEP n .UMBER OF CO OPERATION PARTNERS DURING THE START UP

3TEP n 3EARCHING FOR COMPANIES TO BE CONSIDERED FOR CO OPERATION